United Kingdom Internal Market Bill

Lord Hain Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

[Lord Wigley (PC) [V]]

My Lords, I am delighted to follow the noble Baroness, Lady Finlay of Llandaff. As she has made so many of the points that I intended to address, I shall not repeat them and I shall curtail my comments accordingly. I agree with the telling arguments made by the noble Baroness, Lady Randerson, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I shall also limit my remarks because of the diabolical communications between Wales and Westminster this afternoon. Noble Lords may see this as an ironic reflection on the amendments that we have just been addressing.

I oppose Clause 30 standing part of the Bill and support Amendment 117, to which I have added my name and to which the noble and learned Lord, Lord Thomas, has spoken. Like the noble and learned Lord, I shall desist from being drawn into the argument that Wales has so often been treated as part of England; that is for another day.

In the earlier debate on Amendment 110, the noble Baroness, Lady Bowles, said that the CMA should be equally available to all four nations. During the debate on the last group of amendments, the noble and learned Lord, Lord Mackay of Clashfern, argued that the devolved Governments should have a voice. This is why I have added my name to Amendment 117.

The Bill is reinventing the CMA as a hybrid body with the OIM—very different from the widely respected body that has hitherto existed. The CMA has to be restructured accordingly.

The Bill is bringing the CMA into a highly controversial area, as it will be dragged into polarised arguments between the Governments of the four nations. Several noble Lords have already raised doubts about whether it is in any way appropriate that the CMA should be used in this way. If the CMA is going to act as an adviser to the Government, it has surely to be an adviser to all four national Governments within the UK. It has to be equally responsive to all four Governments and not beholden unto one Government more than the other three.

It is in that context that I support the amendment requiring there to be a nominee of each of the devolved Governments on the CMA board. Unless this is delivered, the CMA will be seen as the referee and as a body beholden unto one of the teams between which it potentially has to adjudicate. This will inevitably lead to conflict, and it is to give the devolved Governments greater confidence in the CMA that Amendment 117 proposes having a nominee of the devolved Governments within its structure. Having rejected earlier amendments to amend the statutory functions to avoid these dangers, the very least the Government can do is accept Amendment 117, or alternatively bring forward on Report an amendment to achieve a similar purpose. I urge the Minister for once to take a sympathetic approach to this constructive amendment.

[Lord Hain (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Wigley, and all previous speakers in the debate. I wish to speak especially in support of Amendments 117, 118, 125 and 131. As Amendment 131 is in the next group, I shall not speak in that debate as I am listed to do.

These amendments concern the future governance of the Competition and Markets Authority—the CMA—and the creation within it of an office for the internal market, or OIM, under the Bill. These amendments seek to ensure that appointments to these bodies are representative of the four constituent legislatures of the UK and that, in overseeing the internal market within the UK, the OIM does not effectively act as an arm of the UK Government and therefore of only one nation, England.

These proposals are important because they are part of the emerging architecture of what Robert Shrimsley of the Financial Times has called the “one-legged economic strategy” of No. 10, namely the “levelling-up” of the UK regions and nations, which appears to mean allowing No. 10 to subsidise favoured industries without any willingness to partner with either the devolved Administrations or, for that matter, regional and local government, such as mayors. In July, the Financial Times quoted an individual close to these discussions as saying:

“The current plan is an odd combination of reserving state aid [for control from London] but then agreeing to a free-for-all. They just want to be able to bung money at things and do not want UK internal market legislation cutting across that.”


The Bill therefore seeks to create a UK-wide, or at least a Great Britain-wide, regime for market access overseen by the new office for the internal market within the CMA that undermines the current devolutionary settlements, certainly for Scotland and Wales and potentially for Northern Ireland, depending on the outcome of the UK trade negotiations.

The provisions of the Bill to curtail the scope of EU state aid rules that could potentially apply through Article 10 of the Northern Ireland protocol, which the Prime Minister agreed to last year, reflect objections by No. 10 to possible “reach back” into the UK by these EU rules. The Government now seek to give the Westminster Government legal powers to control UK state aid, which will potentially replace the estimated £2 billion average annual European Union structural funds previously distributed to the UK’s devolved nations and regions. Just as the Government are resistant to demands by the EU for a level playing field between the UK and the EU, neither do they apparently wish to see the UK’s internal market subsidy regime between England, Scotland and Wales, and possibly in the event of no deal even Northern Ireland, overseen by an independent UK regulator.

The reason why Scotland and Wales in particular are so unhappy about the Bill is that the arrangements proposed are seen by them as undermining the very principles of devolution. This is because the Bill not only curtails devolved competence in specific ways, for example, by making state aid a matter reserved to Westminster, but will ironically also cut much more deeply into areas of devolved competences to regulate economic activity in relation to goods and services than did the previous EU rules. This is because areas of permissible exemptions from similar EU internal market rules, including public health, environmental protection and the protection and promotion of local heritage, do not appear to be exempt from the proposed UK internal market rules. The Bill also gives the Westminster Government new spending powers in devolved areas with no obligations to consult the devolved Administrations.

The previous Conservative Government of Theresa May envisaged that post-Brexit there would be a new legally enforceable regime for state aid under the CMA. However, the arrangement now envisaged for the office for the internal market is that all appointments to its board and the panel of task force members will, like those currently at the CMA, which is a non-ministerial department of the UK Government, be made by Ministers at Westminster and that the role of the new office will be purely advisory.

Amendments 117 and 118 would give each of the devolved Administrations the power to appoint a member of the CMA board itself and would also ensure that the consent of the devolved Administrations is obtained for appointments of the chair and members of the office for the internal market panel. The Bill as it stands provides only for consultation with, as opposed to consent from, the devolved Administrations in relation to such appointments. Amendment 125 would require the CMA to lay its annual plan, proposals for its plan and its annual report before each of the devolved legislatures. Amendment 131—I accept that it is in the next group—contains similar provisions related the involvement of the devolved Administrations in appointments to the OIM and would strengthen the independence and enforcement powers of the OIM so that it would not be effectively an agent of the Crown.

In addition to crucial aspects relating to undermining devolution in the UK, there is an additional disturbing element to what the Government are trying to achieve here. As pointed out by the Institute for Government, under the Bill as it stands the office for the internal market will have very limited powers. Its reports may be useful in gathering relevant information about how the internal market functions, but there is no obligation on any of the Governments to act on them.

In the Conservative manifesto of 2017 there was a promise to use the returning £2 billion average annual EU structural fund money to set up a UK shared prosperity fund. The March 2020 Budget said that the fund would be realigned to match domestic priorities. The Government have yet to publish a consultation on this fund, but the Welsh Government have already made clear that they are strongly opposed to the idea of the fund being administered from Westminster.

The devolved Administrations have vocally expressed their opposition to the proposals relating to the Bill’s blueprint for the future UK economy, which they say was drawn up with no consultation or respect for divergence between the nations. Nicola Sturgeon has pronounced it “an assault on devolution” and the Welsh Government called it

“an attack on democracy and an affront to the people of Wales”.

I have previously argued that the rarely convened Joint Ministerial Committee, which was created to allow the UK Government and the devolved regions to discuss issues relevant to devolution and consider any disputes between the Administrations, should adopt a modified form of the EU system of qualified majority voting so that the Westminster Government would need the support of at least one of the other three nations for a measure to go forward. Such a measure is supported by the Welsh Government, but not—unsurprisingly maybe—by the chair of the committee, Michael Gove.

The Covid crisis has emboldened the UK’s devolved Administrations to make decisions that significantly diverge from those in Downing Street, and they are thought by many to have shown greater surety in their handling of the pandemic than has Westminster. Far from rewarding them for their competence, however, the Government are exploiting Brexit as an opportunity to impose an autocracy on Great Britain, and potentially on Northern Ireland as well, in respect of these internal market rules.

United Kingdom Internal Market Bill

Lord Hain Excerpts

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

[Lord Hain (Lab) [V]]

My Lords, as so often, my noble friend Lord Wigley has spoken for the wide consensus on this question in Wales. I will speak specifically in support of Amendments 74, 75 and 99, which seek to ensure that the Henry VIII powers of the Secretary of State to amend the Bill’s provisions relating to market access on mutual recognition, non-discrimination and the “legitimate aim” of regulatory requirements are referred to the devolved Administrations for their consultation and consent. I do so following a series of excellent opening speeches, notably by the noble Lord, Lord German, and the noble and learned Lord, Lord Hope.

The Bill has been justified on the basis that it is intended to support the UK internal market for goods and services once EU rules no longer apply after the transition period ends on 31 December. These rules, derived from EU law, place constraints on the ability of government institutions within the UK to impose constraints on the free movement of goods, as well as people, and significantly reduce the scope for measures that would restrict intra-UK trade. One reason that the UK Government wish to constrain the autonomy of the devolved Administrations in this area is that countries with which the UK is trying to negotiate trade deals may wish to clarify that they have access to the whole UK market, or Great Britain market if the Northern Ireland protocol survives, as it must do.

A White Paper published by the Government in July 2020 claimed that the Bill would provide “frictionless trade”, “fair competition” and protection for businesses and consumers within the UK. To achieve these aims, two market access principles were identified, namely mutual recognition and non-discrimination, which would constrain the ability of all relevant actors within the UK, be they regulators, local authorities or devolved Administrations, to impose new regulations on goods and services. These limit the ability of devolved Governments to regulate economic activity far more than did their EU predecessors. So much for taking back control. Obviously, that does not apply to devolved legislatures, which will lose control under the Bill—to Whitehall.

The UK internal market was initially seen as one strand of work, begun in October 2017 by the four Governments within the UK, to establish a common approach in key policy areas of returned EU rule, referred to as common frameworks, about which I spoke in the last Session. However, it is generally agreed that, by removing the internal market from these discussions and pushing ahead without the agreement of the devolved Authorities, the common framework approach is being completely undermined by the UK Government.

In response to the White Paper, the Welsh Government insisted that any new system must have independent oversight and dispute resolution, and that common rules must be agreed by all four Governments. When the Bill was published, Jeremy Miles, the Welsh Government Counsel General, called it an “attack on democracy”, and the Scottish Constitution Minister pointed out that the concept of mutual recognition could mean that Scotland, for example, would be forced to accept lower food standards—an area that is currently devolved—against its express wishes.

The mutual recognition provisions would, therefore, effectively prevent one part of the UK unilaterally imposing and enforcing requirements, for example for the presentation or characteristics of goods, which are covered by this principle, which also applies to services. There are exceptions under the Northern Ireland protocol. “Manner of sale” requirements, on the other hand, for example governing to whom products may be sold or their price, would not be covered by mutual recognition but by the non-discrimination provisions of the Bill. The exclusion of price from the mutual recognition principle was driven, in part, by arguments in the other place about what the Bill might mean for Scotland’s minimum alcohol pricing regime—subsequently adopted in Wales, more or less—in response to the public health challenge from excessive alcohol consumption.

Schedule 2 contains lists of services that are excluded from the principles of mutual recognition and non-discrimination, such as healthcare, transport and water supply, as well as some privately provided services. Amendments 74 and 75 require the Secretary of State to consult and/or seek the consent of the devolved Administrations before making changes to Schedule 2.

If there is wariness about enabling any one of the devolved nations to exercise a veto—for example, the Scottish nationalists simply refusing to consent to something which would benefit the rest of the UK —leading to deadlock, why, as I have suggested several times in recent debates in your Lordships’ House, do the Government not adopt the Welsh Government’s proposal for a Council of Ministers-type model with a form of qualified majority voting, in place of the current Joint Ministerial Committee, which has been dysfunctional and, frankly, worse than useless? I specifically ask the Minister to respond to this suggestion of the Welsh Government to have a Council of Ministers-type model with qualified majority voting, which could overcome many of the issues involved. This model would require the UK Government, since it represents England with its disproportionately large population and share of GDP, to secure the agreement of at least one devolved Administration before overriding any devolved Administration that wanted to exercise a veto.

The Bill prohibits both direct and indirect discrimination. The latter is permitted if it can reasonably be considered a “legitimate aim”, as defined in the Bill. However, with the Bill as it stands, the Secretary of State can redefine that term by regulations, subject only to an affirmative resolution procedure. Amendment 99 rightly seeks to ensure that there is consultation and consent from the devolved Administrations before doing so. I cannot for the life of me understand why the Government or the Minister, for that matter, would object to that.

New functions will be bestowed on the Competition and Markets Authority—the CMA—to monitor and report on the impact of specific regulations that are considered to potentially have a detrimental effect on the internal market. The Bill also proposes to establish an office for the internal market within the CMA to oversee the application of these principles and the functioning of the internal market. Expert analysis has shown that, whereas EU law had a symmetrical effect upon the UK Parliament and devolved legislatures, the Bill will have an inherently asymmetrical effect as it will become a protected enactment, which the devolved legislatures will be powerless to repeal or modify.

The Bill will also narrow the territorial scope of devolved legislation. Regulations relating to goods, passed by the Senedd, for example, will apply only to goods produced in Wales or imported directly into Wales from outside the UK. They will not apply to goods imported from the rest of the UK. This, as acknowledged by the business department’s impact assessment of the Bill, would reduce the ability of local legislatures to produce targeted social and environmental objectives, so that the intended societal—[Inaudible.]

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

We seem to have lost connection with the noble Lord, Lord Hain, so I call the noble and learned Lord, Lord Mackay of Clashfern.

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[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, I am told that we have the noble Lord, Lord Hain, again.

[Lord Hain (Lab) [V]]

Thank you, my Lords. I suddenly expired by unilateral mute for reasons that neither the broadcasting hub nor I could understand. I was about to complete what I said so, with the leave of the Committee, I will briefly do so.

The Bill will also narrow the territorial scope of devolved legislation. Regulations relating to goods passed by the Senedd, for example, will apply only to goods produced in Wales or imported directly into Wales from outside the UK. They will not apply to goods imported from the rest of the UK. This, as acknowledged by BEIS’s impact assessment of the Bill, would reduce the ability of local legislatures to pursue targeted social and environmental objectives so that the intended societal benefits “would be forgone”.

It is therefore clear that the market access principles of mutual recognition and non-discrimination set out in the Bill would present a significant threat to the purposes of devolution, which have been democratically established now for nearly two decades. Surely it is not too much to ask that, at the very least, the devolved Administrations should be consulted and their consent sought on the relevant measures in this Bill, as set out in these amendments?

[Lord Liddle (Lab)]

My Lords, there have been many excellent speeches in this debate and I doubt that I have anything much to add.

I commend to the Government that they take note of what was said by the noble and learned Lord, Lord Mackay of Clashfern. This is potentially a critical issue for the future of the United Kingdom. I want to see a United Kingdom survive; I am a passionate supporter of that. That means we must have a well-functioning internal market. However, the Government are making a great meal of this issue, building it up into a much bigger conflict than it needs to be. I urge them to follow the route of reviving and working through the common frameworks that I remember David Lidington proposed as part of the European Union (Withdrawal) Act. I do not see why this new Conservative Government have apparently abandoned the approach that David Lidington took then and are seeking to create a confrontation between the principle of consultation, which they favour, and the principle of consent favoured by the devolved Administrations.

The present Government seem to see Brexit as an opportunity for the assertion of the UK as a unitary state. This is very dangerous for the UK’s future. Take, for example, the structural funds, which play an important part in the Welsh and Scottish economies. Under the devolution settlement, the devolved Administrations were responsible for how structural fund money was spent in their areas. This Government are trying to take that away, establishing new powers to direct investment in Scotland and Wales. The Government are trying to reassert a unitary state. This is the wrong path to be following.

The person I think speaks the most sense on these questions is former Prime Minister Gordon Brown. I want to see us evolving in a federal direction and we cannot do that if we are going to tear up principles that have already been agreed. We are on the verge of making the mistake that the Conservative Party made in the 1880s when it rejected Gladstone’s visionary plan for Irish home rule and we will pay very heavily for the consequences.

United Kingdom Internal Market Bill

Lord Hain Excerpts

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

Moved by

[Lord Hain]

3: Clause 1, page 1, line 11, at end insert—
“( ) This Part only has effect during any time when the United Kingdom is fully in compliance with—(a) the terms regarding the United Kingdom internal market set out in the Northern Ireland Protocol, and(b) the terms of the Good Friday Agreement which are relevant to the United Kingdom internal market.”

[Lord Hain (Lab)]

My Lords, in moving Amendment 3 I wish also to speak to Amendments 157 and 177, standing in my name and those of the noble Baronesses, Lady Ritchie, Lady Altmann and Lady Suttie, for whose support I am most grateful. I spoke on this Bill at Second Reading and set out my fundamental objections to it then. In particular, along with a clear majority in this House, I totally rejected Part 5, which deliberately and cynically drives a coach and horses through the UK’s respect for the rule of law. Not only that, it drives that same coach and horses through the protections we need for the Good Friday/Belfast agreement that successfully brought an end to most of the Troubles, which had blighted life in Northern Ireland since the 1960s.

In that Second Reading debate and in the Committee stage debate on the Trade Bill, I put on the record of this House the horror and disbelief felt well beyond the shores of this United Kingdom. The most striking reaction was that in the United States, where the current President’s Northern Ireland envoy—his former chief of staff—agreed fundamentally with their rivals in the Democratic party that they cannot do any trade deal with the UK if the UK acts against the Good Friday agreement. That is exactly what is happening here in this Bill. It is a legal document that works against the peace agreement for Northern Ireland. In proposing this, the Government have pulled off a spectacular feat in uniting Republicans and Democrats at a time when they have never been more divided. This, of course, is not a feat but a spectacular own goal, even by the standards of this Prime Minister and this Government.

Since I last spoke, the front-runner in the US presidential election has made his position even clearer, in case people were not listening the first time. I want to add to the record of the House the relevant lines from his policy paper, Joe Biden, Irish-America and Ireland, published on 18 October: Joe Biden

“will support active US engagement to advance the Northern Ireland peace process”

and will ensure that there will be

“no US-UK trade deal if the implementation of Brexit imperils the Good Friday agreement.”

There is nothing subtle here. The front-runner to be President of the United States does not like what he sees as this Government seek to implement Brexit. He is sending a strong warning to us, and we in this House have it in our power, through this Bill, to force the Government to change course.

I am sad to note that the Government’s weak and pathetic defences include the wholly spurious argument that this Bill actually protects the Belfast/Good Friday agreement. Words such as “consent” are thrown about in a misleading way—to put it charitably—in order to create an impression that the purpose of these clauses is to protect all those who brought about the peace agreement. Let us look at all those who did that.

First and foremost, there are the people of Northern Ireland. They voted overwhelmingly for the agreement in 1998 and voted firmly against Brexit in 2016. They went on to vote overwhelmingly for parties opposed to Brexit in last December’s parliamentary election. Secondly, there are the political parties themselves. The majority of parties, representing the majority of the people of Northern Ireland, are opposed to this Bill. Thirdly, the Irish Government, the UK Government’s co-guarantor of our peace process, are opposed to this Bill. Fourthly, the United States, which provided the broker for the agreement in Senator Mitchell and has supported it ever since, is unanimous in its opposition, whatever the result of the forthcoming presidential election. Fifthly, the European Union, which backed up the agreement through PEACE funding and through the openness of the single market, is clear that the Bill is in breach of the Protocol on Ireland/Northern Ireland.

Not one of these groups supports what the Government are attempting through this Bill, so whose consent exactly do the Government think they have? I have been racking my brains to think of anyone, but all I have come up with are the Brexit extremists in the Conservative party and the most Brexit-obsessed end of one political party in Northern Ireland, the DUP—that is it. It has now emerged that both Brexiteer and Unionist-sympathising MPs were, late last year, promised an opportunity to address their concerns about the protocol in order to persuade them to pass the European Union (Withdrawal) Bill into law. It therefore seems most probable that No. 10 always had a step like this in mind, even at the very time of signing the withdrawal agreement. So much for the British Government negotiating in good faith.

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

My Lords, I thank all noble Lords who have spoken, particularly the noble Lord, Lord Hain, the noble Baroness Ritchie of Downpatrick, my noble friend Lady Altmann and the noble Baroness, Lady Suttie, who all signed the amendment. I congratulate the noble Lord, Lord Hain, on the measured and thoughtful way in which he presented his case, and on his ingenuity in getting this amendment in so early in the Bill, so that the Committee can debate this important topic, which is one of the abiding matters of interest in the Bill. I do not demur from sensing the opinions the House has expressed on aspects of the Bill, even if I do not agree with them.

I will and must, as invited, repeat the assurances that the Government gave to the House at Second Reading last week, and will do so again when the Committee turns more fully to the Part 5 clauses. I say again, without demur or cavil, that the Government’s overriding priority has been, and will remain, to protect the Belfast/Good Friday agreement and the gains of the peace process. We agree with all noble Lords who have spoken on that fundamental objective. I assure the noble Baroness, Lady Suttie, that Her Majesty’s Government always give the most careful consideration to the impact of any of their actions in this important respect.

I was asked about the human rights aspect. The Government are, of course, committed to the European Convention on Human Rights. We have made that clear before, time and again. However, we have brought forward amendments to the Bill clarifying that regulations made under clauses which the Committee will discuss later will be subject to judicial review on public law grounds. That will provide an effective remedy in the theoretical and limited scenarios in which regulations might conceivably interfere with convention rights. My noble friend has obviously made the due statement on the European convention on the face of the Bill.

The Government’s commitment to the Belfast/Good Friday agreement and to the peace process is beyond question. We all acknowledge the importance of the delicate balance across communities in Northern Ireland. We should all reflect on the importance of not letting opinions and comment flow which suggest, either within or outside these shores, that this Government, this party, the party opposite or any Member of this House do not believe that this agreement is fundamental. We do. Where we differ is that the Government do not agree with many noble Lords who have spoken that the United Kingdom Internal Market Bill undermines the Belfast agreement. On the contrary, the Bill delivers on our commitment to unfettered access for Northern Ireland businesses to the whole UK market. In so doing, it supports the economic and social links between Northern Ireland and the rest of the United Kingdom. In that way, it complements the provisions of the protocol which avoid a hard border on the island of Ireland. It is, and remains, the Government’s position and policy that there should be no such border. The Bill supports the interlocking and interdependent elements of the Belfast/Good Friday agreement.

The Committee will come back to the questions of the rule of law in detail in Part 5, but I repeat what I said at Second Reading: the Government believe that presenting this Bill to your Lordships’ House, and the fact that it passed through the other House, is in accordance with our constitutional norms and does not infringe the rule of law.

Northern Ireland Peers voted, by a majority, against the amendment moved by the noble and learned Lord, Lord Judge, at Second Reading. That was not every Peer from Northern Ireland and I accept that it reflects differences of opinion. We have to note and respect that. The noble Lords, Lord Kilclooney and Lord Trimble, both of whom negotiated and signed the Belfast/Good Friday agreement, voted against the amendment your Lordships agreed to at Second Reading. I repeat: it is the firm resolve of the Government to maintain, and ensure compliance with, the Belfast/Good Friday agreement, and so I disappoint noble Lords who have spoken. I do not believe that the addition of these amendments to the Bill is necessary.

Turning to the references in Amendments 3 and 177 to the Northern Ireland protocol, again, as I have set out, the Government are committed to implementing the withdrawal agreement and the Northern Ireland protocol and have already taken many practical steps to do this, and continue to do so. I assure the noble and learned Lord, Lord Falconer, and others that we are continuing to work with the EU in the joint committee to resolve outstanding issues arising from the Northern Ireland protocol. Our priority is to secure the outcomes that we need in that forum, working in a spirit of good faith, so that the protocol can be implemented in the pragmatic and proportionate way intended. This is intended to give the best platform for it to command support across the whole community in Northern Ireland. Let me repeat: as a responsible Government, we cannot allow the economic integrity of the UK’s internal market to be compromised inadvertently by certain provisions in the protocol without a safety net in place. The Government have been clear in our statements, including on the criteria set out by the Government on 17 September, that these provisions would, in any case, be used only where, in the Government’s view, there had been a material breach by the EU of duties of good faith or other obligations, and be used in parallel with the dispute resolution procedures that the protocol itself establishes.

These amendments as drafted could remove, prevent or suspend our ability to act in the interests of the people of Northern Ireland, and so ensuring they are treated as our countrymen and countrywomen with equal access to the UK internal market. Furthermore, they could leave core elements of unfettered access—not only the safety net provisions—in a state of consistent uncertainty and open to persistent litigation. It is far from clear how compliance with the Northern Ireland protocol, for the purposes of these amendments, would be assessed or who would make the assessment. For example, it is possible that all the provisions in the Bill could cease to have effect if the EU alleged a breach of the Northern Ireland protocol. Any dispute then would be resolved by the appropriate dispute resolution mechanism, which in some cases would include the jurisdiction of the CJEU. That cannot be the means by which we safeguard the links between Northern Ireland and its most important market, Great Britain, which is the subject of the Bill. That cannot be the means by which we safeguard the interests of Northern Ireland from the end of the transition period and beyond.

I am well aware that we will return to these important matters in great detail later in Committee. At this point, however, I urge noble Lords to withdraw or not move the amendments. Before I do, I refer my noble friend Lady McIntosh to the whole of Clause 1(3), which says, as she quoted:

“Those principles have no direct legal effect except as provided by this Part.”


If she looks at the Bill, she will see that in the rest of that part there are number of provisions for secondary legislation. I apologise for that divergence, but I felt I should answer that point. I return to the fundamental position: this Government are wholly committed to the Belfast agreement, they cannot accept these amendments and I urge the noble Lord to withdraw his amendment.

[Lord Hain (Lab)]

My Lords, I thank the Minister for his courtesy and all those who have spoken in support of these amendments. I note that a third of the speakers are from the Minister’s own Benches. I think that shows that there is cross-party, cross-Bench support for the principles that these amendments enunciate.

My noble friend Lady Ritchie of Downpatrick spoke with passion about how this Bill, without these protections, imperils the Good Friday agreement. I want to return to that point when I pick up some of the arguments used by the Minister in a moment.

The noble Baroness, Lady Altmann, made a telling point: why are the Government not accepting their own policy? If their policy is, as the Minister states—I accept that in good faith—that the Government support the Good Friday agreement and the Northern Ireland protocol in protecting the Good Friday agreement, why are they not accepting these amendments? If there is some technical issue, and I will return to one of the issues he raised, we could discuss wording and come to an agreement. I ask the Minister to look carefully at what the noble Baroness, Lady Altmann, said about the Government’s own policy being reflected in these amendments. At least, we think it is the Government’s own policy.

The noble Lord, Lord Carlile of Berriew, spoke with great authority because he has spent many years on this. As Secretary of State, I worked with him on this and his review of terrorist legislation, as did the noble Lord, Lord Cormack, who was a distinguished chair of the Northern Ireland Affairs Committee in the other place. He was hugely respected on the island of Ireland for his diligence and the conscientious empathy he showed towards the situation in Northern Ireland.

The noble Baroness, Lady McIntosh, again speaking from the Minister’s own Benches, was compelling on the fact that this should be a cross-party matter. It was, of course, John Major, as she said, who played a crucial role in the lead-up to the Good Friday agreement that enabled Tony Blair to pick up the baton and drive it forward.

Another contributor to this debate, the noble Baroness, Lady Suttie, to whom I am also grateful to for her support for these amendments, speaks with real authority, particularly about what is at stake here. This is not some technical issue; this is about the future of peace in Northern Ireland. My noble and learned friend Lord Falconer, spoke also about the importance of keeping that border absolutely open on the island of Ireland, to take the process of peacemaking forward.

I ask your Lordships’ House to note that the Minister did not explain how the Bill upholds the Good Friday agreement. He asserted it, but he did not explain how it upholds is, especially given that it repeals the Irish Northern Ireland protocol. On Report, I would urge him to explain in great detail—if necessary, in technical detail—how he thinks the Bill actually upholds the Good Friday Agreement. The majority of contributors to this debate—in fact, everybody except him—dispute that. That is the problem that the Government face in setting their face against these amendments.

Unless there is an ulterior motive here, and I am not suggesting that of the Minister personally but of No. 10 Downing Street, I do not understand. If there are concerns about the implementation of the Northern Ireland protocol, there is a committee, as I mentioned in my speech, co-chaired by Michael Gove with a representative of the EU, to iron out the detailed implementation points. It is a joint committee. That makes us all think that there is something much more serious at stake here, which is undermining the whole foundation of the protocol and, indeed, of the Good Friday agreement with which it sits in partnership.

To conclude, this is a series of very modest amendments. They ask the Government to uphold their own professed policy. That is all they are doing. They are not suggesting some revolutionary change in the Government’s policy. They are asking them to uphold their professed policy on the island of Ireland, in particular on continued progress in Northern Ireland. Meanwhile, I will seek leave to withdraw the amendment.

Amendment 3 withdrawn.

--- Later in debate ---

[Lord Foulkes of Cumnock (Lab Co-op) [V]]

My Lords, I am speaking in support of my Amendments 172 and 173, which, in two different ways, as the noble and learned Lord, Lord Hope, said, seek to achieve the same as his amendment. Like the noble and learned Lord, Lord Hope, I am a member the Common Frameworks Scrutiny Committee chaired by the noble Baroness, Lady Andrews, and I am pleased to be so. Also a member is the noble Lord, Lord Bruce of Bennachie, who spoke earlier on Amendment 4. He described it as a consensus amendment. I wondered—if it was a consensus amendment—why he did not seek a consensus within the House on it, but I discovered why when I opened my Scotsman this morning and saw the big story, which sought to imply, I think, that the Liberal Democrats were taking credit for opposing this Bill and not wanting others to get any credit for that, but he got the support of the SNP in doing so.

Like the noble Lord, Lord Bruce, I am a long-term supporter of devolution. As some here will recall, I campaigned for it in the 1960s and 1970s, when there were few supporters of it in the Labour Party—John P Mackintosh, Donald Dewar and myself were three of the few—there were even fewer in the Tory party and none in the SNP, who wanted then, as they do now, complete separation. When people are picking up arguments in the cause of the SNP, they should never forget that.

Devolution is different from the unitary state we had. I recall well when in Westminster we were dealing with education in Scotland, which was administratively devolved. That was one of the main arguments for devolution: to have legislative control over what was administrative devolution. Devolution is also totally different from separation, but the SNP now see devolution as a means to achieve their aim, as a slippery slope to independence, and that is something we must be wary about. To the noble Lord, Lord Cormack, who spoke in a debate earlier, I say that Westminster remains ultimately sovereign in relation to all matters, although, if it oversteps the mark and tries to do something unacceptable, there must be other consequences.

As others have said, unfortunately devolution was never followed through in England, and we are left with a difficult situation, difficult most of all for the UK Government who regularly try to act on behalf of England as well as their overall responsibility for the United Kingdom. We have seen that in stark perspective in the pandemic. It does not help when the noble Lord, Lord Inglewood, describes them as the English Government. Successful devolution needs understanding and co-operation between both levels. Incidentally, as some people tend now to forget, it was envisaged originally that powers might be transferred back to Westminster if experience has shown something could be dealt with more appropriately at that level.

What I find a bit alarming is how some colleagues—those who were not in favour of devolution before—now seem to believe that the devolved Administrations are always right. It reminds me of the zeal of the convert. There is no greater critic of the Tories than me—I think the noble Lord, Lord Callahan, the Minister, will confirm that. Incidentally, they are not always wrong, but, thankfully, they are not going to be in power forever here at Westminster, so we need to have a more long-term perspective. On this transfer of powers from the European Union, the SNP describes it as a power grab and the Tories describe it as a power surge. Neither is true or helpful.

Before our regrettable withdrawal from the EU, we accepted that all these powers were better dealt with for all of the United Kingdom—Scotland, Wales, Northern Ireland and England—at a European level because we were all part of a common market. Now, we continue to have a common market here in the United Kingdom, so it is sensible that as many of the transferred powers as possible should be dealt with on a common basis. However, it is my view—as it was that of the noble and learned Lord, Lord Hope, and others—that this is best done by agreement through a common framework procedure and by ensuring there is, as one of my amendments says, no regression or diminution of the standards that we take back from Europe. That is what my amendments seek to achieve in different ways.

It could be, as some noble Lords have said, that all four countries have to agree or—the Minister might like to think about this—it may be appropriate to have a qualified majority, so that one Government could not block something useful by mischievous means.

Incidentally, there has been mention again today, from the noble Lord, Lord Purvis, of the threat to minimum alcohol pricing in Scotland. The Minister dealt with it well. It is, therefore, useful to recall that there was a challenge to minimum alcohol pricing, but it came from within Scotland, from the Scotch Whisky Association, based on it breaking European Union law. Interestingly, the ruling was that it did not break European Union law, and it was the United Kingdom Supreme Court that made that ruling. It is important that we separate party politics, which is not easy for us party politicians, and look at what is best for consumers and the public in general. That may be that things are decided at the UK level, or by Wales, Northern Ireland and Scotland separately.

We will soon need to sort out the English democratic deficit, which is real for the people in England and the regions in particular. We need to make devolution complete with a scheme for England, then the United Kingdom Parliament can properly carry out its federal role, maybe with a somewhat different role for the second Chamber.

Meanwhile I, like the noble and learned Lord, Lord Hope, hope that the common frameworks procedure sets a good co-operative working example. It is a better way than the Bill. I say to the Minister—I have not disagreed with him on everything—that it is a better way of dealing with this than the Bill in its current form, as the noble and learned Lord, Lord Hope, rightly said in his introduction. I hope the Minister will accept the general principle of these amendments, before we return to the Bill on Report. It would certainly make his life a great deal easier.

[Lord Hain (Lab)]

My Lords, it is a pleasure to follow my noble friend, with whose speech I completely agree. I speak to Amendment 175, which is also in the names of the noble Baronesses, Lady Altmann, Lady Suttie and Lady Ritchie. It ensures that no regulations may be made under the ensuing Act affecting matters that were within the devolved competence of Scottish Ministers, Welsh Ministers or a Northern Ireland department prior to 31 January 2020, unless a common framework on the United Kingdom internal market or the relevant aspect of it has been agreed between the United Kingdom Government and the relevant devolved Administration or Administrations. In this respect, I agree with all the speeches so far, which began so eloquently and compellingly with the noble and learned Lord, Lord Hope.

Sadly, the Government believe that the best method to achieve their objectives in negotiations with an international partner is to stick out their metaphorical tongue and say that, if they do not cave in, they will tear up an agreement made less than a year ago, even when Britain has more to lose than the EU if there is no agreement. Despite the Sewel convention that the UK Parliament

“will not normally legislate with regard to devolved matters without the consent”

of the devolved legislatures, the Government chose to ignore that all three devolved legislatures denied consent to the EU (Withdrawal Agreement) Bill. I suppose we should not be surprised that, when it comes to the devolved nations of these islands, the Government seem to believe that they hold all the cards and have nothing to lose—apart from, perhaps, destroying the United Kingdom once and for all.

The Government claimed, in their White Paper published in July 2020, that the proposals for the UK internal market would provide frictionless trade, fair competition and protection for businesses and consumers in the UK. However, as pointed out by the think tank UK in a Changing Europe, there is no urgency to introduce such internal market rules because all parts of the UK have been within the integrated EU single market for decades; we have all been together.

The provisions of the Bill are highly controversial. Those in relation to the Northern Ireland protocol have provoked legal action by the European Union and could yet undermine the basis for an EU-UK trade deal. Others cut into the ability of the devolved Governments in Scotland and Wales to regulate economic activity. Not surprisingly, the Scottish Parliament has voted against consent to the Bill, which it said

“constrains the competence of the Scottish Parliament and breaches international law.”

The Welsh Government have recommended that the Senedd follows suit.

So far as Northern Ireland is concerned, what is finally agreed—or not—at a UK-EU level will have far more impact on Northern Ireland’s trade with the rest of the UK than will this Bill. That is because the powers of the Northern Ireland Assembly are already constrained by the Ireland/Northern Ireland protocol, under which Northern Ireland will continue to follow the same EU rules on goods and on customs that it follows now.

For this reason, the market access principles set out in the Bill will not deliver unhindered trade within the UK, as Brexit itself will introduce such friction. After 31 January, the greater Great Britain’s divergence from EU rules in a race to the bottom, the greater the friction on the movement of goods from Great Britain into Northern Ireland, as goods will not be allowed into Northern Ireland unless they meet EU standards. There will also be an impact in the other direction, as lower standards in Great Britain would put Northern Ireland goods at a competitive disadvantage.

These market access measures in the Bill therefore appear to be a power grab against the devolved authorities, especially those of Scotland and Wales. This is because the provisions of the Bill will narrow the territorial scope of devolved legislation, which will apply only to goods produced in that territory, not to those imported from other parts of the UK. The Bill includes a much more restricted set of public policy justifications for exemptions from the market access principles than is permitted under EU law. This, as acknowledged in the business department’s impact assessment of the internal market White Paper, will curtail the ability of the Scottish and Welsh Governments to introduce targeted measures, for example, for social and environmental objectives.

Without the protection of these amendments, therefore, the market access principles will significantly undermine the ability of the devolved Administrations to address their own local needs or political preferences, which is surely the whole purpose of devolution. The Welsh Government have confirmed:

“The Bill automatically applies market access principles without requiring intergovernmental agreements, which will effectively nullify/override Welsh rules on product standards, environmental standards and professional qualifications.”


Referring to “this unnecessary Bill”, the Scottish Government called it an “unprecedented threat” to the Scottish Parliament’s powers. For example, if lower food and environmental standards were allowed elsewhere in the UK, Scotland would be forced to accept them. They also noted that, under the proposals, the UK would take over key devolved spending powers and

“the devolved policy of state aid”.

As for Northern Ireland, the UK Government have ignored a Motion passed by the Assembly in June, calling for an extension to the transition period. Matthew O’Toole, a Member of the Northern Ireland Assembly for the SDLP, has said that the Bill may go down in history

“as one of the most disreputable and damaging pieces of legislation ever proposed at Westminster”

on the grounds that

“it jeopardises all the protections against a hardened border between the north and south”

and that it has undermined trust in one of the signatory parties to the Good Friday agreement.

7 pm

In 2017, despite deep differences on Brexit, the UK and the devolved Governments announced that they had agreed the principles that would guide the development of common frameworks to set out a common UK or GB approach, and to managing the internal market. The UK Government reiterated their commitment to respect the devolution settlements. Common frameworks are not mentioned in the Bill and it is unclear whether regulatory rules established through the common frameworks process would be subject to the market access principles. For example, the Nutrition Related Labelling, Composition and Standards Provisional Common Framework, published on 9 October, notes

“The framework arrangements within this framework will also link into any future arrangements for the UK Internal Market.”

However, that does not provide any clarity on how the two will be linked. This programme, which admittedly is as yet a largely subterranean creature with little visibility to your Lordships’ House, has made good progress. It is true that not all will have completed the process by the end of the transition period, largely thanks to the disastrous negotiation strategy of the Government which led to two abortive sets of no-deal preparations. However, I understand that most if not all have been agreed on a provisional basis and that the devolved Governments have undertaken to fully respect them until they have been through legislative scrutiny.

Moreover, since all parts of the UK will inherit retained EU law, it is completely misleading to claim that there will somehow be a dangerous void in the statute book without this Bill. The only void there will be is where the UK Government want to leave one, notably on state aid policy. What there would be in the absence of this Bill is a restraint on the UK Government being able to tear up retained EU law on environmental standards, food standards, the mutual recognition of qualifications, and would de facto force the devolved Governments to follow suit. That is why this is so objectionable. If pressed, this Bill would undermine the good progress made in many of the areas where common frameworks are being developed, and it is not clear how the provisions of the Bill and the common frameworks could function alongside each other. I hope that the Minister will respond to that point.

I shall take just two examples. If this Parliament decided to permit English farmers to use certain antibiotics that are currently banned for treating animal disease, the sale of English products containing those antibiotics could not be prevented in Wales unless the Welsh Government could demonstrate an immediate threat to public health rather than the slow erosion of antimicrobial resistance. If Scotland wanted to introduce a new requirement for headteachers to obtain a specialist qualification in identifying and dealing with mental health issues in young people, the Scottish Government would struggle to prevent an English or Welsh teacher without that specialist qualification being appointed to a headteacher post in Scotland. For this reason, I wholly endorse the other Cross-Bench amendments suggested by the Welsh Government and tabled by the noble Baroness, Lady Finlay, and others, which would restrict the application of the so-called market access principles to areas where negotiations over common frameworks have broken down. This would give the Government every incentive to work with the devolved institutions to agree common frameworks and the chance to come back to this House and the other place if they believe that a devolved Government were attempting to wield a veto. Surely the way forward is to negotiate common framework agreements in all areas where the UK Government feel they have an interest, but which cover areas within devolved government competences. That is what the amendment seeks to achieve, and for the life of me, I cannot comprehend why the Government will not accept it. Perhaps the noble Lord the Minister will explain.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I declare an interest as a member of the Common Frameworks Scrutiny Select Committee, ably chaired by the noble Baroness, Lady Andrews. The noble Lord, Lord Foulkes, and the noble and learned Lord, Lord Hope of Craighead, are also members of the committee. I am a signatory to Amendment 175 along with the noble Lord, Lord Hain, and the noble Baronesses, Lady Altmann and Lady Suttie. The specific purpose of the amendment, as ably demonstrated by the noble Lord, Lord Hain, is to state that no new UK regulations can be made affecting any area that devolved prior to Brexit, including any area with cross-border impacts, without a common framework agreement with the devolved Governments concerned.

As has already been explained, these amendments, particularly this one and others in this group, focus on the primacy of the common frameworks and the importance of devolution. In many instances, throughout this Bill, the Government seem intent on power grabs from devolution to bring power directly to Whitehall. Quite clearly, the aim of our Amendment 175 is to protect devolution. I can think of those special devolution arrangements in Northern Ireland—of which I was once a part as a member the Northern Ireland Assembly and also as a former Minister—that arose out of the Northern Ireland Act 1998 and as a consequence of the Good Friday Agreement. They were based around those interlocking sets of three relationships within Northern Ireland: between north and south on the island and east-west between Ireland and Britain, and the accompanying infrastructure arrangements. These were reflected in the Northern Ireland protocol, and in the Withdrawal Agreement that the Government now seem intent on scuppering through this UK Internal Market Bill.

Interestingly—as the noble and learned Lord, Lord Hope of Craighead, and others have referred to—this Bill does not contain common frameworks. I was at a recent briefing with others, such as the noble and learned Lord, Lord Hope. It was very well organised by the Minister and the noble Lord, Lord Callanan. It was attended by the Minister for the constitution, Chloe Smith. She indicated that the reason why the frameworks were not in the legislation is because they are not all legislative. I found that reason very odd, but also very hollow and flimsy. As the Centre on Constitutional Change has stated, common frameworks are not mentioned in the Bill and it is unclear whether regulatory rules established through the common frameworks process will be subject to the market access principles. This is an issue that has also been addressed by the Lords Constitution Committee and by a group of academics for the Centre on Constitutional Change in their paper entitled UK Internal Market Bill Devolution and the Union, which was published last week.

To go back to the Lords Constitution Committee, it states at point 15 in its conclusions that:

“The Government should explain why the Bill does not mention common frameworks and how it expects the arrangements for the UK internal market will relate to the common frameworks.”


It further states at point 16 that:

“The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective UK internal market. Such an approach would obviate the need for the Bill.”


Academics for the Centre on Constitutional Change who published their paper last week stated:

“By abstracting the internal market from these frameworks and pushing ahead unilaterally against opposition from the authorities in Scotland and Wales, the UK Government is putting the common frameworks approach at risk.”


They also state that the market access principles in the Bill weaken devolution, reduce divergence and risk undermining the objectives and principles that have guided frameworks discussions.

The market access principles within the Bill undermine devolution competences in two ways. The UK Internal Market Bill itself will become a protected enactment, which the devolved legislatures will be unable to repeal or modify—hence our Amendment 175.

The Bill also narrows the territorial scope of devolved legislation. Currently, devolved legislation applies to all relevant activity within the devolved territory. This will no longer be the case as a result of this Bill, if it is enacted. The effect of the market access principles would, therefore, significantly undermine the purpose of devolution, which was to enable the devolved nations and regions to legislate according to their own local needs and political preferences. While I am supporting and speaking to Amendment 175, I also support other amendments in this group because they clearly specify the importance of devolution and, above all, the common frameworks scheme.

United Kingdom Internal Market Bill

Lord Hain Excerpts

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

[Lord Hain (Lab) [V]]

My Lords, I was delighted to listen to my noble friend Lady Hayman, who will add high-quality, youthful value to our Labour Benches.

This Bill will breach the European Union withdrawal treaty, freely entered into by the Prime Minister less than a year ago, and the rule of law, as the noble and learned Lord, Lord Judge, and my noble and learned friend Lord Falconer so eloquently argued, significantly backed, among others, by a very recent Conservative Europe Minister, the noble Lord, Lord Bridges. It has also further damaged British-Irish relations by undermining the Ireland-Northern Ireland protocol, necessary to avoid a hard Irish border. As with the Trade Bill, there is an urgent need to insert clear protections for two international agreements the United Kingdom has entered into and ratified recently: namely, the Belfast/Good Friday agreement and that very protocol.

As the Bill undermines the Good Friday agreement of 1998, US leaders have stated bluntly that it could jeopardise any chance of a UK-US trade deal. Without the unifying framework provided by the EU, responsible for policies including state aid, the environment, agriculture, food manufacturing and animal welfare, the Bill represents a clear power grab by London from the devolved Governments. The Prime Minister has suddenly discovered the benefits of having a single market—the UK internal market of 66 million people, rather than the much larger and richer EU single market we have been a member of, of over 500 million.

Under the Bill, not only is state aid policy to be returned from the EU to Westminster but the UK Government also get new financial powers. Both proposals will further weaken the current intergovernmental arrangements, whose fragility has been exposed by Covid-19. Perhaps we should not be surprised that the Government adopt the posture of a public schoolyard bully when it comes to the devolved nations of these islands, where No. 10 seems to believe it holds all the cards and has nothing to lose—apart from perhaps destroying the United Kingdom.

For more than three years, the Governments of Wales, Scotland and Northern Ireland have sunk their very large political differences with the UK Government over Brexit in order to address its fallout in terms of managing the UK internal market. This led to the common frameworks programme, which was intended to take the areas of the economy where—and I stress this—the UK Government believed there to be a risk to the integrity of the UK’s internal market from the removal of the constraints to regulate in accordance with EU rules. This Bill brushes all those common frameworks arrogantly aside.

Whether or not there is an orderly end to the transition period in December, Brexit will have implications for the totality of the relationships between Westminster and the nations and regions of the UK, and for those on the island of Ireland, with the financial provisions of the Bill tightening Westminster control over economic, industrial and regional development policy throughout the UK. This is likely to fuel calls for indyref2 in Scotland and, eventually, a unification referendum in Northern Ireland. It may be that this Bill serves to hasten the break-up of the UK, which is another strong reason to oppose it.

Trade Bill

Lord Hain Excerpts

Committee stage
Tuesday 13th October 2020 Lords Chamber

Moved by

[Lord Hain]

58: After Clause 2, insert the following new Clause—
“Trade agreement with the EU: compliance with the Protocol on Ireland/Northern Ireland
Any trade agreement between the United Kingdom and the European Union that is subject to sections 20 to 25 of the Constitutional Reform and Governance Act 2010 is not to be ratified unless it fully complies with the requirements of the Protocol on Ireland/Northern Ireland as part of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, as signed and ratified by Her Majesty’s Government.”

[Lord Hain (Lab) [V]]

My Lords, in moving Amendment 58 on the Irish protocol, I will speak to Amendments 59, 65 and 82 in my name, on the Irish Sea, and to the amendments in the names of the noble Baronesses, Lady Altmann, Lady Suttie and Lady Ritchie, to whom I am most grateful for their support. The amendments have been lumped together in one group, so I am afraid that my speech will be a bit longer than is customary for me. I am sorry to say that Amendments 58 and 59 are not just sensible and prudent to include in this legislation; they are absolutely essential, and I will seek agreement to put them to a vote on Report.

When this House was due to debate a Trade Bill prior to the general election last year, my colleagues and I worked on similar amendments with a similar objective: to protect the Good Friday/Belfast agreement in all its parts and prevent a hardening of the border on the island of Ireland. A year ago, this was already a strong case. It was also consistent with the European Union (Withdrawal) Act, which is already law and into which this House placed important text along the lines of these amendments, with the eventual agreement of the Government. I hope that the Minister will note that in his reply. However, today—one year on—including these additional protections could not be more important for this Bill and for the Internal Markets Bill, on which we will have Second Reading on 19 October.

I remember only too well the Government’s responses to myself and colleagues on a cross-party basis in 2018 and 2019 as we sought explicitly to include these protections for Northern Ireland and the island of Ireland. “Trust us”, they said. “Of course, we will protect the Good Friday agreement, and of course we will ensure no hard border”, they insisted. “This is superfluous and unnecessary”, we were told.

I am sorry but we did not trust them then and we definitely do not trust this Government now—not after their actions in recent weeks. We thought that they could not get any worse in their cavalier and dangerous approach to Northern Ireland—part of our United Kingdom—but they have surpassed themselves. As noble Lords will know, I had the honour to serve as Secretary of State for Northern Ireland, as did other noble Lords. It was a real privilege to hold that office. Those of us who have served, whether Labour or Conservative, know how unique and ever-fragile matters are on the island of Ireland.

The peace process is not done and dusted—it remains a continual challenge. That is why I and other previous Secretaries of State were so horrified when the current holder of that important office, Brandon Lewis, nonchalantly and very deliberately let it slip in the other place that the internal market Bill

“does break international law in a limited and specific way”.—[Official Report, Commons, 8/9/20; col. 507.]

Tellingly, among those expressing their horror were Secretary of State Lewis’s two immediate Conservative predecessors, Julian Smith and Karen Bradley. Add to that multiple previous Prime Ministers and Attorneys-General, not to mention the Northern Ireland envoy of the current President of the United States, the Democratic nominee for President of the United States and the Speaker of the House of Representatives.

We must vote decisively to add the provisions in these amendments to this Bill, soon to the internal market Bill, and to any other relevant Bill that comes before us. The Government may not respect the law any more, so the law must tie the Government’s hands appropriately. We must leave no stone unturned, no route open to them to wriggle out of. I regret to put it so firmly, but I am afraid that that is what we are dealing with. Even without the developments of recent weeks, we need Amendments 58 and 59. We have included a specific obligation to fully respect and implement the protocol on Ireland and Northern Ireland, as included in the withdrawal agreement that this very Government agreed, and this Parliament ratified.

As I have said here before, sadly, this Prime Minister, his Ministers and advisers, continue to try to pretend that Northern Ireland is no different from anywhere else—that it is just another border, just another straightforward place. I might have given Kent as an example of a straightforward place but, of course, we now know that the Government are actively preparing for a hard border there too.

Let us remind ourselves why we have the Northern Ireland protocol. The border, of course, is the key sensitive issue, over which much blood has been spilt over the generations, and much suffering endured. It is a 300-mile border with 300 crossings, unlike almost any other border in the world, but there is more to the protocol than the border. We have the unique arrangements under the Good Friday/Belfast agreement for north-south co-operation—no less than 157 different areas of cross-border work and co-operation in Ireland, north and south.

These areas are the things of everyday life; they go well beyond animals and food and we must not ever have a new border erected to block or discourage them. People can travel to and fro, do business, get educated or get health treatment, as if the border were invisible. I shall give just a few examples of these arrangements: food, tourism, schools, colleges, farming, fighting crime, tackling environmental pollution, water quality and supply, waste management, bus services, train services, cancer care, GPs and prescriptions, blood transfusions, gas supply, electricity supply and, yes, co-operation on health pandemics as well.

Almost every one of these areas is about people’s everyday lives and almost all were linked to the European Union, and Ireland’s and the UK’s common membership of it since 1973. With regret, I accept the reality that we have left the European Union, but that is precisely why we have this Irish protocol: to ensure there is no interference with or disruption to those arrangements, either through no deal, reneging on the protocol or any new trade agreements we may someday strike with other partners. For if there were to be, it would be a major step backwards, making the Irish border a contentious matter again, with all the danger to peace and stability that that will mean. We must prevent that happening at all costs.

I have said it in your Lordships’ House before and I will say it here again: the work of successive UK and Irish Governments in helping courageous and visionary leaders in Northern Ireland was all about taking down borders, not putting them up. These amendments would ensure that our Government stay true to that vital mission.

I turn to Amendments 65 and 82, covering the Irish Sea question. Northern Ireland faces great uncertainty as we exit the transition period. Although the Northern Ireland/Ireland protocol in the withdrawal agreement guarantees Northern Ireland free access to and from the single market of the European Union for goods, three areas of grave concern still exist. The first is what the future UK-EU relationship will look like; the more distant this is, especially if there is no deal, the greater the impact of the protocol when it comes to the movement of goods from Great Britain into Northern Ireland. This means that internal UK trade is potentially in play here; this is why it has been picked upon by the United Kingdom Internal Market Bill, but in a way that only increases the risk to that slim certainty that Northern Ireland had, and only increases the likelihood of no deal and of badly damaged trust.

Secondly, there is uncertainty about how the protocol will operate in practice. The trader support service is a vital element in this operation, but there are still some 60 “known unknowns” when it comes to how the protocol is to be enforced. The doubt instigated by the Government’s move in the internal market Bill escalates concerns from merely being about practice to being about the very legal status of this protocol itself.

Thirdly, there is uncertainty about Northern Ireland’s status with regards to free trade agreements. Although it will be de facto in the European Union’s customs union and single market, it looks as though Northern Ireland will not benefit from the free trade agreements held by the EU. This could prove to be severely disruptive to its export markets. More directly, there are worries that, for all the promises of the Government, Northern Ireland will be effectively excluded from the UK’s future free trade agreements too. While your Lordships’ House can do little to affect the first of these three concerns, Amendments 65 and 82 seek to address the other two.

Amendment 65 would ensure that Northern Ireland goods are not discriminated against. The UK has said that Northern Ireland will benefit from access to its new free trade agreements. This makes sense, on one hand, because Northern Ireland is in the UK customs territory. However, it is not straightforward, because the EU customs code will be applied in Northern Ireland, as will its standards for the production of goods. As a consequence, there is a possibility that when it comes to free trade agreements, a potential free trade agreement partner will say, “Hang on, what’s the story with Northern Ireland? Why will our goods have to go through customs procedures to get into it, and why do EU goods have free access into Northern Ireland, and thus potentially unfettered access into Great Britain?” These things make it difficult to deal with the UK as a single entity. What will the UK do in such a scenario and in response to such a free trade agreement negotiating partner?

There is a risk that Northern Ireland will not be included in future UK free trade agreements, or that there will subsequently be discrimination against Northern Ireland goods, or even new customs processes when entering Great Britain. This is a particular risk as long as there is no serious anti-avoidance regime to stop Republic of Ireland or EU goods passing off as Northern Ireland goods and thus getting free access into Great Britain, undermining ones from the rest of the world. Even more fundamentally, there is a question about the status and labelling of Northern Ireland goods, because these have to follow EU rules on labelling as well, of course, as on standards. Because Northern Ireland goods will be produced in accordance with EU rules under the Ireland/Northern Ireland protocol, this amendment would ensure that Northern Ireland goods, in particular, will not be discriminated against as a consequence of any new UK free trade agreements.

Ministers often pooh-pooh these concerns, but take the very practical example of a perfect storm coming in Northern Ireland when it comes to food poverty. This is because of increase grocery costs for goods coming from Great Britain, especially for those in rural communities reliant on small retailers. Add to that jobs lost from the coronavirus pandemic and the growing numbers on universal credit—up from 58,000 in February this year to 108,000 in May and, I guess, more since—which is proven to increase food poverty, as any families living on universal credit can testify.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, the amendments in this group all relate to various aspects of the Northern Ireland protocol. Amendments 58 and 59, tabled by the noble Lord, Lord Hain, the noble Baronesses, Lady Suttie and Lady Ritchie of Downpatrick, and my noble friend Lady Altmann, seek to make the ratification of any future UK-EU international trade agreement contingent on compliance with the protocol. I listened very carefully to the hard-hitting and long speech from the noble Lord, Lord Hain. I am very aware that he speaks passionately on Northern Ireland matters as an ex-Secretary of State for Northern Ireland and that he spoke again today with great passion. We have been clear that we remain completely committed to the Belfast/Good Friday agreement. We are committed to implementing the protocol in a flexible and proportionate way, protecting the interests of both the whole United Kingdom and the EU.

Our proposals for implementing the protocol will deliver unfettered access for Northern Ireland businesses to the whole of the UK market, ensure that there are no tariffs on goods remaining within the UK’s customs territory, discharge our obligations without the need for any new customs infrastructure for Northern Ireland, and guarantee that Northern Ireland businesses benefit from the lower tariffs that we deliver through our new free trade agreements with third countries. This approach is, in our view, the best route for commanding the broadest possible support across the whole community in Northern Ireland, respecting the myriad ways in which lives and livelihoods are intertwined right across our United Kingdom. This came out, again, in the speech by the noble Lord, Lord Hain.

The Bill that we are debating here does not address the UK’s future relationship with the EU. Other than the government procurement agreement, it is concerned only with continuity agreements: that is, agreements to which both the EU and the relevant third country were signatories before exit day. While I understand the noble Lord’s concerns, there will be better opportunity to debate them elsewhere. In accordance with the Constitutional Reform and Governance Act, both Houses will have the opportunity to debate any UK-EU future trade agreement before it is ratified. Similarly, as the noble Lord, Lord Hain, acknowledged—and the reasons were eloquently outlined in the speech of my noble friend Lord Lansley—noble Lords will soon have a chance to debate their concerns regarding the protocol when the United Kingdom Internal Market Bill reaches this House all too soon, on Monday, for scrutiny.

I turn now to Amendment 60, in the name of the noble Lord, Lord Hain, the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie, and my noble friend Lady Altmann. As I set out during our debate last week on devolution, the Government have engaged closely with the devolved Administrations and have taken significant steps to improve this Bill. I hope this was made clear in the remarks that I made last week. I would like to take this opportunity to inform your Lordships that the Scottish Parliament consented to grant an LCM to the Trade Bill last week. I hope that this illustrates the close engagement that the Government have undertaken and will continue to undertake with the devolved Administrations.

On Amendment 65, the Government will ensure unfettered access for Northern Ireland goods moving from Northern Ireland to Great Britain, ensuring that businesses and individuals will be able to move goods from Northern Ireland into the rest of the United Kingdom on the same basis as now, while also benefitting from new trade deals. The United Kingdom Internal Market Bill will ensure that businesses based in Northern Ireland have true unfettered access to the rest of the United Kingdom by ensuring that they benefit from mutual recognition and are not discriminated against. This will be the case whatever the outcome of negotiations with the EU.

On Amendment 82, in the name of the noble Lord, Lord Hain, the noble Baronesses, Lady Ritchie and Lady Suttie, and my noble friend Lady Altmann, I am pleased to say the new Trader Support Service—the so-called TSS—that the Government are introducing, will provide an end-to-end service that will guide traders through all import processes. It will provide extensive support to businesses engaging in new administrative procedures resulting from the unique circumstances in Northern Ireland. It is a free service available to all traders moving goods between Great Britain and Northern Ireland and those importing goods into Northern Ireland from the rest of the world.

In response to various questions on TSS, I shall give a little more detail. It will offer the following core services. The TSS will benefit trader education by educating businesses about what the protocol means for them and the steps they need to take to comply with them. Secondly, it will support businesses when submitting declarations and advise them about additional documents and licences they will need; for example, a permit is needed to import endangered species. It will provide a complete service that submits relevant declarations into CDS, submits relevant safety and security declarations into HMRC’s import control system, the ICS, and in some circumstances will transmit transit declarations on NCTS.

In answer to the question asked by my noble friend Lord Lansley, the TSS and its future will be reviewed after two years. My noble friend Lady Noakes asked about costs. She will know, and I want to emphasise, that the TSS is a unique intervention, backed by £200 million of government funding.

I hope that these explanations address your Lordships’ concerns and that they will not wish to press their amendments.

[Lord Hain (Lab) [V]]

My Lords, I am grateful to my noble friend Lord Stevenson and all those who have spoken in this debate, beginning with my noble friend Lady Ritchie, who speaks with authority as someone affected daily by our decisions in this Parliament. She spoke eloquently about the intricate relationships so carefully and painstakingly built over decades to break down barriers. We must not do anything that reverses that process.

The noble Lord, Lord Lansley, said that he agrees with Amendment 58, but that it is not necessary because it is already in the European Union (Withdrawal Agreement) Act 2020. The noble Baroness, Lady Suttie, rightly argued that in the internal market Bill a part of the protocol is being repudiated. I say with some sensitivity and moderation to the noble Viscount, Lord Younger, that there is a lack of trust regarding the Northern Ireland-Irish protocol situation that has been engendered by the Government themselves.

The Government signed up to a protocol that they are now seeking to undermine through the internal market Bill, breaching international law and breaching trust with Dublin so painfully built over careful decades of negotiation and relationships. The relationship between Dublin and London now is terrible, and I can totally understand that as a former Secretary of State for Northern Ireland. We should never have got into this situation. As the noble Baroness rightly says, it is ironic that a group of cross-party Peers is having to defend what is nominally the Government’s own policy but which they are undermining. That is why these amendments are absolutely necessary.

The noble Baroness, Lady Noakes, said the Trader Support Service would be extended if needed, so why not put it in the Bill through the amendments concerned? If there is a technical issue, the Minister can come back on Report and propose the addition of a regulation allowing the Government to extend it. Presently, it is limited to two years. I am puzzled about the Minister’s response. Effectively, he is saying that he agrees with these amendments in principle, but that on the one hand there is no need for them and on the other there is an opportunity for them later. I say gently to him that there is always supposed to be an opportunity later, but the reality is that by the time later comes it is too late. A trade deal may not have been struck with the EU and the consequences will already be a fait accompli.

Trade Bill

Lord Hain Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 8th October 2020 Grand Committee

[Baroness Altmann (Con)]

My Lords, I have added my name to Amendments 61 and 62, spoken to so excellently just now by the noble Baroness, Lady Ritchie of Downpatrick. It is a pleasure to follow other noble Lords. These amendments are also supported by the noble Baroness, Lady Suttie, and the noble Lord, Lord Hain. I also support the general aims of the other amendments in this group.

This Bill is particularly concerned with non-tariff trade barriers. Nowadays, regulatory barriers to trade are often the most crucial parts of free trade agreements. When introducing this Bill, my noble friend talked about strengthening and protecting the devolved Administrations. I wholeheartedly agree with these sentiments, and that is indeed what these amendments aim to achieve.

As other noble Lords have said, the Westminster Government have the reserved power to negotiate and sign international trade agreements. However, while standards for manufactured goods may also be reserved, powers over implementation of regulations in areas such as agriculture and food products are matters for the devolved Administrations. In order to be able to implement newly negotiated free trade agreements, the Government surely have a direct interest in including the devolved Administrations, as these amendments seek to introduce into the Bill. Failing to do so could clearly put the union at risk.

Of course, the Westminster Government could ultimately get around refusals by devolved nations to implement the agreed terms of an FTA by coercion. But, if free trade agreements result in battles between London and the devolved Parliaments—with Scotland, Wales or Northern Ireland taking the English Government to court over terms of a trade agreement to which they had not agreed—it is likely that our ability to strike further deals would be called into question. Surely there would be a far greater likelihood of success in future if the devolved Governments were involved at an early stage. I urge my noble friend to take note of how Canada operated when negotiating the CETA deal. It included its provincial Governments in its negotiations, which ensured that any commitments they made were more credible and more easily accepted across Canada.

As the noble Baroness, Lady Humphreys, said, the UK is a “family of nations”. Absolutely. In the modern era, a family is considered to function best when all its members are involved in decision-making, rather than the dictatorial senior parent ordering everybody to obey their wishes and do what they are told. This causes particular strife when, for example, another family member is promised control over certain decisions which affect their daily life and well-being, but then finds that they were misled. Westminster must surely accept the need to include the devolved Governments in areas of such significance. Respecting their needs at an early stage and including them as soon as possible will ultimately result in better agreements.

Can my noble friend explain the Government’s thinking in resisting these amendments? Specifically, in relation to Amendments 61 and 62, reserved powers over international trade are limited by two constraints. I have already mentioned that the implementation of trade agreements for agri and food is devolved. The second is the Northern Ireland protocol. According to this protocol, EU regulations on goods—whether manufactured or agricultural—are supposed to continue to apply in Northern Ireland for the duration of the protocol. Annexe 2 includes the whole EU acquis for product standards. If the EU amends these rules, Northern Ireland is supposed to change, too.

We will come back to the position of Northern Ireland in a later group, but I hope my noble friend will consider these amendments carefully—or his own wording to achieve these aims when we reach Report.

[Lord Hain (Lab) [V]]

My Lords, I echo the words in particular of the noble Lord, Lord Wigley, and the noble Baroness, Lady Ritchie. The noble Lord, Lord Wigley, spoke eloquently about the situation in Wales and the noble Baroness, Lady Ritchie, about Northern Ireland.

Amendments 61 and 62 are also in the names of the noble Baronesses, Lady Ritchie, Lady Altmann and Lady Suttie. I also support Amendment 57, tabled by my noble friend Lord Stevenson of Balmacara. I want to focus on the appalling record which this current Administration have in their approach to the elected, devolved Governments and legislatures of Wales, Northern Ireland and Scotland.

The United Kingdom is currently engaged in what are without doubt the most crucial trade negotiations of the last 50 years: the negotiations about our future trading arrangements with the EU, our largest trading partner. But, unlike most such negotiations, these are not about securing additional benefits for our businesses from a liberalisation of trade: no, the stakes are even higher, because these negotiations are about preventing the introduction of new barriers to trade which all have the potential, even if an agreement is reached, to cripple our manufacturing industry, with a loss of jobs in sectors which are particularly important—for example, to Wales, aerospace and automotive—leaving the devolved Governments with their responsibility for economic development to pick up the pieces.

The negotiations with the EU will also directly impact on issues wholly within devolved competence, such as health and education, since a failure to negotiate mutual recognition of our medicines licensing regime, for example, will lead to increased costs and delays in accessing new treatments, while the failure to secure continued participation in the Erasmus+ programme will impoverish the educational experience of thousands of young people in Wales and indeed across the United Kingdom.

What opportunity have the devolved institutions had to influence, let alone shape, these negotiations? Mike Russell, the Scottish Government’s Constitution Minister, pointed out in June that

“we had virtually no involvement in producing”

the negotiating guidelines or legal text published by the Government,

“and indeed only saw the legal texts—with no possibility of changing them—24 hours before they were published.”

Jeremy Miles, the Minister for European Transition in the Welsh Government, has talked about the

“absence of meaningful Ministerial engagement, where UK Ministers discuss and seek to agree with us not just their formal starting position but the approach they expect to take as the negotiations evolve.”

The Joint Ministerial Committee on European negotiations, whose terms of reference are to “seek agreement” on the approach to the negotiations, did not meet at a key time for preparing for these negotiations between 28 January and 21 May of this year. On top of this frankly insulting approach, the Government have now published their internal market Bill, which not only threatens to break international law—and is proclaimed as doing so—but is an outrageous and outright attack on the very basis of the devolved settlements in this country. That is why there is a great deal of concern in all the devolved Administrations.

In this context, it is surely for us, above all in your Lordships’ House, to stand up for the rule of law and the rights of political institutions that were put in place over 20 years ago to protect and promote the interests of those parts of the United Kingdom, each with a distinct identity and social and economic needs, which had been marginalised by the preceding majoritarian political system. That is why my amendments and others which I shall support, such as Amendments 26 and 50, seek to entrench the role of the devolved Governments and legislatures in future trade negotiations that will inevitably shape, and potentially restrain their freedom to exercise, their powers in respect of issues such as food standards and environmental regulation, which sit squarely within their competence.

The devolved institutions are, quite rightly, obliged to implement international agreements which are entered into by the UK Government, even where the matters involved are otherwise under their control. It cannot be right that they are bound in this way without having any rights to influence the outcome of the negotiations that result in such obligations being imposed on them.

Underlying these constitutional issues is the kind of state the UK wants to be: either one run by diktat from the centre, as Boris Johnson’s Ministers are doing over trade negotiations with the European Union and in this Bill—and especially in the internal market Bill—or one run on the principle of democratic consent and mutual respect for all the Governments: the UK’s and those of the devolved Administrations.

But there are practical policy issues at stake as well, and here are my main concerns. Trade deals today, perhaps with the exception of a future UK-EU one, if there is one at all, extend into a wide range of social provision and domestic policy issues, such as workers’ rights, environmental protection and safety, product and food safety regulations, and procurement. As a result, trade deals are often politically contentious: the more comprehensive they are, the more they are likely to be seen as leading to a loss of regulatory autonomy and democratic accountability. As such, it is wrong to see free trade agreements as purely “business” or “trade” concerns: they reach right to the core of responsible government and public welfare. Many of the areas covered by free trade agreements—for example, agriculture, the environment, forestry, health and economic development —are within the competence of the devolved Administrations.

Trade Bill

Lord Hain Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 6th October 2020 Grand Committee

Some of these claims are pending, some are without merit, some are inflated and many more are “outcome unknown”—but the chilling effect on democratic Governments is obvious. Why then invite such threats against our own? Regulations must not permit this repugnant mechanism, which gives foreign corporations the power to threaten our Parliament and override the laws and courts of our country—a mechanism denied to our citizens. I beg to move.

[Lord Hain (Lab) [V]]

My Lords, the Covid-19 pandemic has shone a spotlight on unacceptable working conditions, especially those endured by many key workers, and on some of the downsides of globalisation—job insecurity, zero-hours contracts, unfairly poor pay, discrimination and lack of recognition—and it is a pleasure to follow my noble friend Lord Hendy’s very able and expert moving of Amendment 17.

The Covid-19 pandemic has emphasised the significance of employment laws and of gaps in international trade agreements, notably the inadequate protection of labour standards and the woeful lack of requirements that contractors for public sector work should abide by ILO conventions ratified by the UK. Ministers have been keen to distinguish between trade deals rolled over from pre-existing EU trade agreements and new deals yet to be struck independently of the UK. The focus of the Trade Bill is on the former, but if these are to be the foundations for future UK trading relationships in the post-Brexit period, they hardly look secure: far from it. Instead, the Bill is full of holes.

This amendment seeks to fill in some of those holes. It guards against regulations implementing any trade deal that permits investor-state dispute settlement arrangements that expose democratically decided laws to potential threat from foreign companies claiming billions in compensation for supposed losses. My noble friend Lord Hendy spelled out examples and I will add two others. These are not hypothetical threats. Canada has been sued for a moratorium on fracking in Quebec, and Mexico for attacks on sugary drinks to fight diabetes. The amendment will also prevent trade deals that contravene international standards of labour law, such as ILO conventions to which the UK is committed and articles of the European Social Charter, ratified by the UK.

Succeeding in global markets today demands more than matching your competitors’ prices. It means setting fresh standards of product quality and providing unparalleled levels of customer service. That can be done only by adopting world-class ways of working and by treating your workforce with respect for the standards set by ILO conventions. For the life of me —I mentioned this when I last spoke in this Committee—I do not understand why the Government are not accepting these amendments, unless they have an entirely different deregulated, low-labour-standards, low-tax, Singapore-on-Thames agenda for Britain. So I hope that the Minister will reassure us on that point when he replies.

[Baroness Blower (Lab) [V]]

My Lords, I am pleased to speak on Amendment 17, to which I have added my name.

While the history of trade negotiations may not be completely littered with the fragments of failed attempts, it is certainly the case that the Transatlantic Trade and Investment Partnership, TTIP, failed, after several years of negotiations, to come to any conclusion. In Britain, much of the opposition was on the basis of the perceived—and I believe very real—threat to our NHS: the threat that the NHS would not survive as a public service and that the writ of privatisation would run ever more unchecked. I was pleased to hear a most eloquent speech from the noble Lord, Lord Patel, offering a catalogue of already privatised and outsourced elements from our NHS, and, significantly, pointing out the dangers that this posed.

Equally, the opposition to TTIP, not just in Britain but across Europe, focused, as my noble friend Lord Hendy said, on the investor-state dispute settlement mechanism—ISDS. My noble friend gave chapter and verse on the reasons for opposing ISDS. I concur with his remarks and associate myself with those of my noble friend Lord Hain.

Let me add a perspective from the United Nations, specifically from the United Nations Conference on Trade and Development. As the Committee might expect, ISDS features in UNCTAD reports. In May of this year, we find the following in one of its reports:

“Foreign investors have used ISDS claims to challenge measures adopted by States in the public interest (for example … to promote social equity, foster environmental protection or protect public health)”—


all issues close, I am sure, to the hearts of many in this House. The report goes on:

“Broad ISDS mechanisms typically used in old-generation”


international investment agreements

“provide for the contracting parties’ advance consent to international arbitration and are characterized by broad scope, few conditions for investors’ access to ISDS and a lack of procedural improvements. As ISDS is at the heart of the IIA reform process, in recent IIAs countries have carefully regulated ISDS and at times omitted it”

completely.

UNCTAD goes on to make a number of recommendations, but I shall confine myself to this one:

“Replacing ISDS by settling disputes in domestic courts and/or through State-State dispute settlement”.


In July, UNCTAD returned to the question and said:

“Policy responses taken by governments to address the COVID-19 pandemic and its economic fallout could create friction with existing IIA obligations. This highlights the need to safeguard sufficient regulatory space … to protect public health and to minimize the risk of”


ISDS proceedings.

There are huge problems with the ISDS mechanism, from Philip Morris to the Portuguese metro and so many more. It would therefore be wise for the Government to heed the words of the United Nations—but, more so, to heed those of my noble friend Lord Hendy. ISDS should have no place in our future trade arrangements. I will listen extremely carefully and with great interest to the response from the Minister.

Trade Bill

Lord Hain Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

[Baroness Burt of Solihull (LD)]

My Lords, I shall speak to Amendment 3 on small businesses, to which I have added my name. As we enter the post-transition and post-Covid world of international trade, we must ensure that the role of SMEs in procurement is fully protected so that it can help strengthen the UK’s economic playing card as we navigate the current turbulence and beyond.

At Second Reading, I asked the Minister, the noble Lord, Lord Grimstone, whether, given our new freedom from the EU, we should adopt the policy of the US, Canada, South Korea and Japan to put an annexe in our GPA schedules to allow them to set aside and disapply regulations on behalf of small businesses and other organisations to help bring parity of support for small businesses in accessing markets against larger firms. After all, is that not why the UK decided to leave the EU in the first place? The noble Lord informed me that non-discrimination is the core principle of procurement in the UK and we do not have set-asides for SMEs in international agreements. Okay—I hear him. But whether or not it is intended, it can be more difficult for small businesses to compete against larger firms by virtue of their size and the complexity and requirements of the procurement process.



I will not detain the Committee by going through them all, but when pitching for public contracts, I suggest that few small businesses would feel that the playing field was equal. Take late payment, the scourge of small businesses, particularly because of the relative power of the organisation doing the procuring. The Federation of Small Businesses has long been calling for bad payers to be barred from applying for government contracts. I know that this is something that the Government acknowledge, and this amendment would effectively help the Government to defend themselves against late payers on the trading stage. Why does the Minister feel confident that, when we are competing against the likes of the US, South Korea and Japan, UK small businesses will get fair access to public contracts? Nobody wants to see poor payment practices on the trading stage; this is about fairness and parliamentary accountability, so I would appreciate some commitments from the Minister today.

That brings me to the point of the amendment. It lays a duty on the Government to ensure that small businesses can compete fairly to get greater access to procurement contracts in countries to which the GPA applies. It makes sure that the Government fulfil this obligation by laying a Statement before Parliament reporting that this has been done, and the outcome. If the Minister is committed to a level playing field for small businesses, why not agree to put it into law?

[Lord Hain (Lab) [V]]

My Lords, I support Amendment 1, moved so ably by my noble friend Lord Lennie. I wish to speak specifically to Amendment 5 in the name of my noble friends Lord Hendy, Lady Blower and Lady Bryan. Why? One year ago, on the same day—24 September 2019—that the UK Supreme Court ruled the Government to have unlawfully sought to prorogue Parliament, the Prime Minister was in New York presenting his vision of a post-Brexit Britain to an audience of American business leaders. It involved undercutting European tax rates and adopting lower standards of environmental protection, consumer safety and labour rights than those set by the European Union. It foresaw a low-tax, lightly regulated haven on the European Union’s doorstep, not interested in competing on a level playing field but intent on winning any race to the bottom.

This Trade Bill seeks to take us one step closer to fulfilling the Prime Minister’s dream. It does so more by omission than by commission. As in Lena Horne’s “New Fangled Tango”,

“It’s not what you do do, it’s more what you don’t do”.


It does nothing to promote labour standards. It does not stop signatories to trade agreements seeking unfair competitive advantage by failing to comply with International Labour Organization conventions. It provides no powers for government bodies in the UK to impose public procurement conditions on contractors requiring them to abide by UK labour law or by ILO conventions ratified by the UK. Instead of levelling up labour standards, the Bill encourages shady employers who want to undercut their more responsible rivals by shafting their workforce. It does so by turning a blind eye to bad employment practice and pretending that unfair exploitation does not exist, despite ample evidence that it is widespread from employment tribunal cases and from the daily experience of trade union representatives in workplaces nationwide.

This amendment would put a stop to any regulations implementing the Agreement on Government Procurement if that agreement could in any way hinder the ability of UK state authorities—be they central Government or the devolved Governments—to set conditions on anyone tendering for a public contract. The power of the public purse should be used to raise labour standards and to encourage compliance with global standards such as those set in ILO conventions.

--- Later in debate ---

[Lord Hain (Lab) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Kramer, who spoke very eloquently; I endorse what she said.

I will speak to Amendment 18, in the name of the noble Lord, Lord Hendy, and my noble friends, which I have signed. I very much endorse the speeches of my noble friends Lord Stevenson and Lady Bennett. On Amendment 18 in particular, I welcome and endorse the excellent contribution of my noble friend Lord Hendy, who adds enormous authority on these issues.

My noble friend mentioned that the Canada-European Union agreement—CETA—includes the very kinds of provisions that we are asking for in Amendment 18. I note that leading Conservatives—Brexiteers—have spoken of “Canada-plus” as a future basis for a trade agreement with the European Union. Does Canada-plus mean labour rights-minus? A failure to adopt Amendment 18 would imply that that is the case, and that that is the real agenda of the Brexiteers.

Amendment 18 would preclude the UK from agreeing any international trade agreement if its regulations contravened the UK’s international labour law commitments. The UK is a member of the International Labour Organization and has been so since 28 June 1919. Under the auspices of the ILO, fully 88 conventions and two protocols have already been ratified by the United Kingdom. I cannot see why the Minister could not agree to this amendment and why the Government would not endorse it since, in effect, it reinforces the status quo to which we have already signed up in all future trade agreements.

Of course, that is unless the Government’s real agenda is a kind of Singapore-upon-Thames, with a deregulated structure of labour rights, environmental rights and all sorts of other rights that we have come to expect as representing the standards that we want in Britain; an offshore haven of low labour regulations, low standards and low tax. That is what leading Conservatives, particularly the Prime Minister and his henchman Dominic Cummings, have been talking about. Surely we should not be racing to the bottom in every respect for British citizens and workers but seeking to match the best, such as the Scandinavian countries, which have high standards in these matters—high levels of public services and the public expenditure to sustain that. They have also had, by the way, much higher levels of productivity and economic success than Britain has had under this Government for the last 10 years, prior to Covid.

What sort of “taking back control” will it mean if we do not adopt Amendment 18, or at least a version of it that the Government might favour for technical reasons? What does “taking back control” mean for Brexiteers? Instead of high-quality, high-skilled standards it would mean low-quality, low-skilled standards, particularly on labour rights.

I should point out that the ILO standards that this amendment seeks to reinforce and insist on for any future trade agreements that the UK might strike with other countries are a minimum, not a maximum. They have been achieved by agreement across the world and therefore, inevitably, are not the maximum we should be aiming for. Surely we should, in a high-quality Britain that aims to be the best for its citizens, aim for the maximum. As my noble friend Lord Hendy said so poignantly, the amendment is surely uncontroversial because it asks the Government to adopt in future trade agreements what they have already signed up to in ILO conventions and protocols. I hope that the Minister will accept it or explain why not and what sort of agenda is really on offer for the British people from his Government.

[Baroness Blower (Lab) [V]]

My Lords, I have added my name to Amendment 18. As has been said by my noble friends Lord Hendy and Lord Hain, it is an uncontroversial amendment. I too look forward to the Minister’s response, in which I am sure he will welcome it.

I consider it fundamental that the rule of law should be enshrined in the Bill, as should the legal authority of the United Kingdom courts and the principle of equality before the law. It should go without saying that respect for the rule of law can be relied on in the United Kingdom. However, as doubts may have been cast thereon in recent weeks, this amendment is necessary to ensure that international trade agreements observe both the conventions of the ILO—mentioned frequently in this debate and up to which Britain has already signed—and the ratified articles of the 1961 European Social Charter.

My noble friend Lord Hendy has provided a full rationale for this amendment and, as amply demonstrated by reference to CETA, precisely how it can and should work. I fully endorse and concur with his remarks and I look forward to the Minister’s response.

Trade Bill

Lord Hain Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 8th September 2020 Lords Chamber

[Lord Hain (Lab) [V]]

My Lords, I also welcome the maiden speeches by the Minister and the right reverend Prelate.

The UK faces the economic consequences of the global pandemic amplified by a no-deal Brexit. The Government have now admitted that, even with a Canada-style deal, non-tariff barriers and checks by the EU will come into force. Incredibly, the Government’s border operating model will create an internal UK border in Kent, with truckers required to acquire a Kent access permit, or KAP, for the required paperwork before travelling, on penalty of a £300 fine.

The Brexiteers seem to remain under the delusion that they can replace the EU market—the richest and biggest in the world, and which constitutes nearly half of our trade—with new agreements with countries such as the US, which constitutes 16% of our trade; Japan, which constitutes just over 2%; and Australia and New Zealand, which constitute less than 1%. Leaked government forecasts suggest that a trade deal with the US would benefit the UK economic output by only about 0.2% in the long term. Japan has been reluctant to agree a deal more favourable than its existing agreement with the EU. As for Australia and New Zealand, they have a combined population of 30 million, compared to the EU’s 450 million.

For the last couple of years, the Department of International Trade has been scrambling to roll over the 40 or so existing EU agreements with over 70 countries, constituting another 10% of our trade, excluding Japan. The DIT website shows that roughly half of these countries have signed rollover deals, often with human rights provisions watered down. The Bill fails to provide for essential parliamentary scrutiny of such future trade deals, as recommended by the Institute for Government to protect, among other important matters, human rights, workers’ rights and the environment. Parliamentary scrutiny should extend to the UK’s future membership of the World Trade Organization’s Agreement on Government Procurement to protect public services, such as the NHS, which are at risk from grabs by US companies under the Government’s agenda.

Then there are the reckless briefings in the media to renege on the Irish protocol in the EU withdrawal treaty, which would mean the UK defying international law, not to mention poisoning relations with by far our biggest trading partner and undermining the Good Friday agreement.

The spurious claim that, cut off from open access to the EU, Brexit would enable the UK to make advantageous trade deals is unravelling before our eyes. The Bill does nothing to mitigate the disastrous economic consequences of no deal, or a thin-deal Brexit, now tragically in prospect.

Post Office: Horizon Accounting System

Lord Hain Excerpts

Monday 7th September 2020 Lords Chamber

[Lord Callanan (Con)]

The review is non-statutory, but the Post Office, Fujitsu and the Government have all committed to co-operate as fully as possible with the review. The chair will, of course, be fully independent of both the Post Office and Government, and will draw conclusions and recommendations as they see fit.

[Lord Hain (Lab) [V]]

My Lords, we all know that sub-postmasters are the pillars of local communities, and yet they have suffered by being compensated for an insultingly small proportion of the losses they incurred through this terrible scandal and the cruel unfairness that followed. The Minister says that he does not want to interfere, but the Government are 100% owner of the Post Office—the Permanent Secretary of the department is its accounting officer and there is government representation on the board. The Government are ultimately responsible for this scandal. It is not good enough to keep delaying this with lots of process and reviews. They must be compensated fully.

[Lord Callanan (Con)]

The court case resulted in a substantial award of compensation and the Post Office has a separate historical shortfall scheme, which it is looking at and progressing. We want to get on with this as quickly as possible. I agree with all the comments which have been made. This is an appalling scandal: it has originated over many years and we are doing what we can to try to get to the bottom of it.