United Kingdom Internal Market Bill

Lord Liddle Excerpts

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

[Lord Morrow (DUP) [V]]

My Lords, I will be very brief. I am concerned about Amendments 14 and 15, which both clearly state that:

“Before making regulations under subsection (7) the Secretary of State must”


consult

“the Scottish Ministers, the Welsh Ministers and the Department for the Economy”.

I asked myself why it is specifically the Department for the Economy in Northern Ireland but not in Wales or Scotland. Can the Minister clarify in winding up why it is specifically the Department for the Economy? The distinction is made in a couple of other parts of the Bill. Surely it is clear, given that the grounds for discrimination cover areas such as animal health and biosecurity, that the Department of Agriculture, Environment and Rural Affairs would have a deep interest in any changes. Thus the restriction to consult only the Department for the Economy is a bit difficult to understand.

I strongly contend that Northern Ireland should be treated in exactly the same way as other regions of the United Kingdom. Would the Minister be good enough to clarify in winding up on this group why it specifically states only the Department for the Economy, and not the Northern Ireland Assembly or other ministries? I will leave it at that.

[Lord Liddle (Lab)]

My Lords, it is welcome that the Government, in the shape of the noble Lord, Lord Callanan, have got up today and made some concessions to the position articulated in this House in Committee. We all welcome that, but he has not gone far enough. In Amendment 15 in particular, what he describes as imposing additional processes on government would actually be very valuable—particularly in the present political context, in which the Government have thrown a lot of doubt on their commitment to the devolution settlement.

In that context, I endorse the speech of my new Labour colleague, my noble friend Lady Clark. A serious political crisis is looming on the devolution question and, in everything we do, we have to behave with enormous sensitivity to the fact that that is a realistic prospect before us. Therefore, I do not see Amendment 15 as nitpicking, in the way that the noble Baroness, Lady McIntosh, described it; I see it as strengthening the principle that the Government have already conceded.

As a federalist and someone who believes in a federal Britain, I believe that this is an inadequate response to the devolution problem. I rather agree with the noble Lord, Lord Empey, when he says that we should have an arrangement where none of the four nations of Britain can veto a proposal that the other three agree with. I do not believe that England can always exercise that veto through the United Kingdom Parliament—that is what we have to change. If we are to keep the United Kingdom together, I believe that we have to think of new arrangements where decisions are made by a United Kingdom council that properly represents the nations, and, I hope, the regions and cities of England as well. That is a personal point about where I think we should be going.

Therefore, I do not see this as a particularly radical amendment that will address the present growing concerns about the devolution settlement. None the less, it is a sensible amendment, which I support, and I hope very much that my Front-Bench colleague, my noble friend Lady Hayter, will divide the House on it, unless we hear in the Minister’s response that the Government will make a significant move in its direction.

It seems to me that the merit of this amendment is that, by saying that the Secretary of State “must” seek consent, it puts on the face of the Bill the argument that disagreement should be the exception and that we should go into this with all sides—particularly the UK Government—determined to reach consent. Where there is no agreement, to win consent for that decision it is very important that there is a requirement for an explanation of how it is consistent with the devolution settlement, where the principle that the Government have set out is that the devolved Assemblies and Parliaments will have more, not less, powers as a result of withdrawal from the EU. In that explanation, the Government would have to demonstrate why that was so. They have already listened to some extent but I very much hope that they will listen more to what those of us on this side of the House have said, and that the Minister will indicate that he might go further.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

The noble Baroness, Lady Altmann, has withdrawn, so I call the next speaker, the noble Lord, Lord Bruce of Bennachie.

--- Later in debate ---

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

My Lords, I support Amendments 22 and 23, but I shall refer in particular to Amendment 22 in the names of the noble Lords, Lord Wigley and Lord Hain. Again, this is about ensuring that no straitjacket or limit is placed on the procurement practices of devolved Administrations. It is about protecting their functions, with particular reference to the market access principles, which should not override devolution settlements. The noble Lords, Lord Hain and Lord Empey, referred to the situation of Northern Ireland which, in terms of goods for procurement purposes, will be subject to the Northern Ireland protocol and, therefore, the EU.

While I believe there is a need to ensure that there are no borders anywhere, whether in the Irish Sea or on the island of Ireland, notwithstanding that, there are areas of clarification required. Can the Minister say, or perhaps write to us on it at a later stage, whether any procurement practices would apply to the devolved Administration in Northern Ireland which would be subject to UK oversight as per the Bill? Will there be any at all?

Secondly, on the previous group I asked the Minister whether he could provide an update on the interparliamentary Brexit forum, which consisted of representatives of the devolved Administrations and the UK Government. It has not met since September 2019. Maybe he could provide us with an update on when its next meeting is likely to take place.

Further to the point made by the noble Lord, Lord Empey, I am reminded of those made by the UK constitution monitoring group. It said that government Ministers have occasionally asserted that the United Kingdom Internal Market Bill is not a constitutional measure at all but is concerned only with economic policy. It would therefore perhaps be better to characterise it as a key building-block in an emerging economic constitution for the UK, post Brexit. However that may be, the group believes that the Bill raises fundamental questions about the governance of the UK following withdrawal from the European Union, in particular whether it will be possible to establish a common understanding of the future role and importance of the devolved institutions in UK governance. Would the Minister like to comment on that statement in his wind-up, and will he assure the House that market access principles will not be used to override the devolution settlement?

[Lord Liddle (Lab)]

My Lords, I will speak briefly in favour of both these amendments, particularly Amendment 22 on the question of public procurement. When I was Europe adviser in Downing Street, I formed a view that the British authorities—in Whitehall and the Government Legal Service—took a more legalistic approach to implementing the state aid rules, the non-discrimination rules and so on of the European single market than did most other member states. It was quite an effort to get the system to think differently about these questions.

One of the most notable achievements where we thought differently was towards the end of the Labour Government, when my noble friend Lord Adonis, who is not in his place, insisted that the award of a big contract for railway carriages and new trains would go to Hitachi but on condition that it built a plant to construct them in Shildon, County Durham. That was a success in breaking the established orthodoxies; it came rather late in the day, but there we are. Then when my noble friend Lord Mandelson was trying to bring back the concept of industrial policy, also towards the end of the Labour Government, one of the big questions was that of public procurement. I really am not a protectionist; I believe in open markets and that, on the whole, the benefits of free trade are very considerable. But there are circumstances in which public procurement can be used to support local business in a way that is justified.

One of the ways of doing this, of course, is that if you have innovative local firms with a lot of potential to grow, they can easily be squeezed out of the market by competition from big companies which can produce at much cheaper prices. I believe that one reason why we have not been as innovative as we should is that we have not used public procurement to support small and medium-sized enterprises with great potential for growth. This was one of the things we were trying to do towards the end of the Labour Government.

However, I also believe that that kind of policy is difficult to run from London. That makes this kind of public intervention, which is about not spending subsidies on lame ducks but trying to grow the economic potential of a local area, one that is best decided upon as close as possible to that area. That is why it is a terrible mistake to try to limit the powers of the Welsh and Scots on these matters. In fact, I would like to see proper devolution in England so that English authorities could do this outside London. This amendment has my wholehearted support, and I hope that the Government will give it a very considered response.

[Baroness Noakes (Con)]

My Lords, I have spoken in several debates on Report about the impact of further restrictions on the scope of the UK’s internal market for goods covered by the market access rules. The plain fact is that, the more that is taken out of the ambit of the rules on mutual recognition and non-discrimination, the more likely it will be that consumer detriment will follow, whether by way of increased costs or reduced choice. With that background, let me turn briefly to the two amendments in this group.

In respect of the amendment of the noble Lord, Lord Wigley, on procurement, I have to confess that I am not an expert on procurement rules—unlike the noble Lord, Lord Liddle—so I will have to tread carefully not to display the extent of that ignorance. But my instinct is that if we try to take procurement out of the UK’s internal market rules, we will end up harming the UK’s internal market, which would be harmful for all parts of the United Kingdom.

The noble Lord, Lord Wigley, explained what had been happening in Wales in entirely reasonable terms, but it seems a relatively short step from that to applying discrimination in an unreasonable way—and for no reason other than to support nationalist views. I am sure that would not happen in the Welsh Government, but I can think of somewhere else where it might.

In addition, when we talk about benefits for one nation, we have to see the disbenefits to that nation’s businesses if they in turn are locked out from public procurement markets in other parts of the United Kingdom. In particular, we have to understand that Scotland, Wales and Northern Ireland export more goods into other parts of the United Kingdom than England does into the other three nations. If we have an internal market that works on parochial or nationalist principles, that is likely in the long run to harm Wales, Scotland and Northern Ireland, as much as it may appear to give them gains in the short-term, so I do not support his Amendment 22.

I turn briefly to Amendment 23, which I am not sure would work in practice. Paragraph (b) of the proposed new clause refers to

“a proportionate means of achieving a legitimate aim”—

but the term “legitimate aim” has no definition here. It is defined in Clause 8, but that deals only with indirect discrimination, so I do not think that the amendment would work on its own terms. In addition, we had a good debate on the substance of these issues in the group of amendments that we discussed on the first day of Report, and this amendment does not take us any further than that, so I hope that the noble Baroness, Lady Boycott, will not press it.