United Kingdom Internal Market Bill

Debate between Lord Hain and Baroness Boycott

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Baroness Boycott (CB)]

My Lords, I agree with many of the noble Lord’s points. I have tabled Amendment 23 and I am very grateful to the noble Lords, Lord Whitty and Lord Randall of Uxbridge, for supporting it. It simply seeks a derogation from market access principles to allow all four nations of the UK to put in place proportionate measures to protect the environment, to support the progressive improvement of environmental standards and to tackle climate change.

The combination of the market access principles in the Bill and the absence of an agreed common framework means that, although different Administrations will not be prevented from introducing different standards, in practice we risk seeing a stifling of innovation and a chilling effect when one nation wants to introduce different, higher environmental standards for a particular good or service, or wants to introduce other measures to tackle climate change. Effectively, we are disincentivising Governments from aiming higher because incoming goods from other parts of the UK implementing lower standards will not have to meet the new ones.

Some examples bring this issue to life. The first is the sale of peat for horticulture, which should not happen anywhere, but if any of the four nations were to decide to ban the sale of peat for horticulture due to its impacts on biodiversity, that nation would still have to sell peat from elsewhere in the UK. A second example is single-use plastic. The Welsh Government are currently proposing to ban the sale of nine single-use plastic products, but we are proposing to ban only three. Given how the mutual recognition principle currently operates, Wales would have to allow the sale of the six additional products if they had been manufactured elsewhere in the UK, which would totally undermine that policy. Thirdly, the Government are planning to phase out the sale of household coal and wet wood next year in England. However, under the mutual recognition principle the sale of both household coal and wet wood from other parts of the UK would carry on in England.

In Committee, the Minister said that protecting the environment and tackling child climate change are vital. The EU provides that in certain circumstances, it is possible to go beyond its commonly agreed standards to protect the environment—for instance, banning particular kinds of packaging, such as metal drink cans. However, the Bill as drafted does not allow for environmental or climate-related exceptions. It provides for exceptions in only a limited range of circumstances, such as to prevent the spread of disease or pests or to authorise the use of a chemical in a particular part of the UK. There also exclusions for fertilisers and pesticides, which were added during the Bill’s passage through the Commons.

My amendment asks for one further, crucial addition to the list of exclusions—for environmental standards and for tackling climate change. I would welcome the Minister’s clarifying the decision-making process. Why was it considered necessary to introduce exclusions in certain policy areas, but not in others such as the environment and climate change? I know that that is a broad brush stroke, but it is still possible to address individual elements, which currently we are not. Surely, there can be no more important time to incentivise ambitious climate and environmental policy.

[Lord Hain (Lab)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Boycott. I endorse everything she has said; indeed, her amendment is powerfully put. I shall speak specifically to Amendment 22, tabled by my good friend the noble Lord, Lord Wigley, to which I have added my name. He spoke very eloquently about the need for the amendment, and I shall briefly add one or two points to his compelling speech.

Procurement is clearly devolved to both Scotland and Wales, as is made clear the recent transposition of EU procurement directives being achieved via legislation in the Scottish Parliament. Does the Minister agree that that is indeed as clear-cut as I have stated and believe it to be? It would be helpful to get that on the record.

There is strong interest in the Senedd in improving the impact of procurement on the Welsh economy by encouraging suppliers to have operations located in Wales, creating employment locally and using local supply chains, a point well made by the noble Lord, Lord Wigley. That is not discrimination. A company based in Scotland or indeed Lithuania can meet these conditions, but that flexibility is important so that the Welsh Government can continue to ensure that the billions of pounds spent by the public sector each year in Wales through procurement processes creates value in the local economy for a nation that has seen massive deindustrialisation. I still live in my old constituency of Neath, which was a heavy industry and mining constituency. The consequences of deindustrialisation have been huge, dismembering those communities and depriving them of the industrial base and secure jobs they once had. The ability, using the public sector, as the Welsh Labour Government are trying to do, to create and support strong local companies is very important. Such community benefit clauses and approaches were possible even under European law.

I had an informal conversation with the noble Lord, Lord Empey, about Northern Ireland’s position. Of course, Northern Ireland is still subject to the single market and customs union rules—even after the UK leaves the EU—under the Northern Ireland protocol. It is my understanding and belief that under EU law, it is still possible to use procurement in the proactive, positive way that the Welsh Government have done to support local jobs and businesses. Can we be assured that that will not be undermined, or even made illegal, by this centralising Westminster Government?

Procurement can also be used to discourage a race to the bottom—for example, by requiring bidders to have strong employment rights policies and equal opportunity policies in order to qualify for a successful procurement opportunity. It is really important that the devolved Administrations continue to have the opportunities and rights to use procurement in that proactive and creative fashion.