United Kingdom Internal Market Bill

Debate between Lord Hain and Baroness Pitkeathley

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.

--- Later in debate ---

[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?

Parliamentary Constituencies Bill

Debate between Lord Hain and Baroness Pitkeathley

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 15th September 2020 Grand Committee

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

Baroness Jolly. No? If the noble Baroness is not with us, we shall go on to the noble Lord, Lord Hain.

[Lord Hain (Lab) [V]]

My Lords, I shall speak to Amendment 22 standing in my name and that of the noble Lords, Lord Wigley and Lord Cormack, and the noble Baroness, Lady Finlay of Llandaff, to whom I am grateful.

Why this Bill? Is there a clamour from voters to change their constituencies? No. Do, for example, rural voters in Wales want even larger constituencies because they think that their MPs are too close to them? No. So what is the motivation?

Much is made by Ministers, as the noble Lord, Lord True, has already done, of the case for equalisation, but equalisation has been the principle behind our constituency system for generations—we all accept that principle. The point is that the Boundary Commissions have had the discretion to apply it fairly and sensibly, taking proper account of local views, of community identity and of geographic sparsity instead of being rigidly straitjacketed, as this Bill requires.

The Bill means that the uniqueness of Wales, in the past always having had special consideration by this Parliament, including in the 1944 Act, and by the Boundary Commissions, is ignored. In no other nation of Britain, proportionate to the population, are there such large and remote areas and vast geographical rural areas where there are thousands more sheep than people and constituencies are hundreds of square miles if not larger. Yet under this Bill, four existing geographically large seats in Wales could well become, and almost certainly will become, two monster ones. Instead of being hundreds of square miles in size, each will become thousands of square miles, in mid-Wales, north Wales and west Wales—none of them, by the way, Labour seats, so no party pleading is going on here.

Much has been made about the Bill creating constituencies that are more equal in size, but that has come at the expense of community ties, history and geography. We do not live in a world where populations grow in neat conurbations which fit an electoral quota dictated from on high. Nor does our geography in Wales lend itself to communities being switched dogmatically between constituencies to help achieve that quota. Our existing system already takes account of that by trading off strict electoral quotas in order to prioritise community identity, local ties and geography. Identifying with the constituency we live in and the close link between an MP and their constituents are fundamental to our parliamentary democracy and envied by democracies around the world.

The rigidity of the electoral quota and the 5% variance provided for in the Bill put that in jeopardy and give primacy to a rigid mathematical equation which is damaging for our democracy. That is why Amendment 22 proposes, in relation to Wales alone and to meet its specific needs, that the electorate of any constituency be no less than 85% of the United Kingdom electoral quota and no more than 115% of that quota. Why is this needed? Wales’s unique geography means that constituencies can vary drastically, from vast rural constituencies which are sparsely populated, such as the existing Brecon and Radnorshire, to densely populated, small urban constituencies in Cardiff and Swansea.

It is no surprise that two of the five largest geographical constituencies, Montgomeryshire and Dwyfor Meirionnydd, are also two of five smallest in electorate size, while two of the five largest electorates, Cardiff South and Penarth and Cardiff North, are also two of the five smallest geographical constituencies. There is a logic to that. There are seven constituencies in Wales which are more than 1,000 square kilometres in size—Brecon and Radnorshire is more than 3,000 square kilometres—but because of the rigid electoral quota used during the last review under the previous legislation, the Boundary Commission for Wales ended up proposing mega constituencies to achieve numerical parity and to cover the vast areas of sparsely populated rural Wales, as I described in great detail when moving Amendment 14. Much the same will happen under this Bill.

Mega constituencies like that will only alienate voters from those whom they elect to represent them, leaving them feeling more cut off and remote than before. It is a toxic combination which will lead to disengagement and undermine democracy. Equally, the strict quota is problematic for valley constituencies and makes the task of creating constituencies which make sense to valley communities extremely difficult.

It is not easy to move single communities from a valley and dump them in a different constituency. By their very nature, valley communities are linked and do not easily connect with neighbouring valleys. To reach a neighbouring valley you cannot just drive over a mountain of fields and forests. You have to drive to the top or the bottom, making communication take longer and not easy. Valley communities are also linked to specific towns in terms of transport, community links and historical ties. These community ties form the basis of many of the valley constituencies in the south Wales area, which I know well, still live in, and represented for a quarter of a century.