State Aid (Revocations and Amendments) (EU Exit) Regulations 2020

Lord Liddle Excerpts

Wednesday 2nd December 2020 Lords Chamber

[Lord Liddle (Lab) [V]]

My Lords, I very much want to support the amendment that my noble friend Lord Stevenson is moving. I think that the proposal before us today is symptomatic of the poor quality, dysfunctional Government that we now have. I do not think that I am going to express myself in quite the polite terms that he did, because I think that what is happening is appalling.

As a member of the Secondary Legislation Scrutiny Committee, we thought it very strange indeed that such a major decision was being taken by statutory instrument. It is a major change of policy. It is a change from the policy that the noble Lord, Lord Callanan, himself advocated in this House during the passage of the EU withdrawal Act, when he explained how the European state aid regime would be adopted by the UK but be run in future not by the European authorities but by the British authorities—the CMA. Yet the Government are casting that aside, abolishing the present regime, without frankly having a clue—a clue of the slightest clue—about what they are going to replace it with.

The WTO regime is not a credible state aid regime. I am a strong supporter of trying to build up the WTO—it is very important that our effort goes into that in future and, with the change of President in the US, it might be possible—but, frankly, its regime on state aid is a bit of a joke. There is no need to secure prior notification of any kind, there is no proper enforcement mechanism and there is a tribunal that President Trump has made largely ineffective. The Brexiteers’ greatest friend, President Trump, is the person who has done more to damage the WTO than any other figure.

There is no clarity on the Government’s part about what kind of state aid regime they want. All they know is that they think it is essential that the London Government should be in control of whatever it is. That is the argument we have had on the internal market Bill, where they insist that state aid is a reserved matter when in fact the devolved Administrations have had considerable discretion over how they allocate public funds in support of economic development. The Government’s behaviour on this undermines the devolution settlement as well as being economically incoherent.

The Minister kept repeating that what we are doing here gives business certainty. It gives business no certainty whatever, because who knows what the regime is going to be? The refusal of the British Government to set out a state aid regime is one reason why it is so difficult to conclude the trade agreement with the EU. The EU does not have a clue how the Government intend to sustain any kind of level playing field, which is a perfectly reasonable request in a trade deal.

This is a very bad policy and a very bad move. I believe in state aid; I believe it is necessary to support restructuring. I am not in favour of subsidising lame ducks, but I am in favour of trying to give companies in difficulties a viable future. State aid is important in promoting innovation, particularly in the high-tech industries that are our future. Frankly, though, this does not get us anywhere near having a credible state aid policy. It is a typical Brexit act, taking a leap into the unknown without a clue about what you are actually trying to achieve.

Comprehensive Economic Partnership (EUC Report)

Lord Liddle Excerpts

Thursday 26th November 2020 Grand Committee

[Lord Liddle (Lab) [V]]

My Lords, I, too, welcome the noble Lord, Lord Darroch, to the House of Lords. In my seven and a half years in Downing Street, I worked closely with him and, for me, he is in a long line of very distinguished diplomats who tried to make the best of Britain’s relationship with Europe. I was very interested to hear his comments about his early posting in Japan. The Japanese economic relationship with Britain is crucial, and I remember how, in the 1980s, a decade of industrial gloom, inward investment from Japan was a symbol of hope, particularly in the north-east, south Wales and other depressed areas. The noble Lord, Lord Kerr, is right to remind us that a lot of what lay behind that was our membership of the single market, which was then being born and being deepened. If there is a lesson of that history, it surely must be that the future success of our relationships in the Pacific, which will be very important—the doorway opened up to the Pacific partnership is very important—depends on us maintaining our close relationship with the European single market, which is still our biggest market.

What of the lessons of the present agreement? If I were being cynical about it—and I think this is how a European trade official would describe it—Japan has extracted a high price for what is effectively a continuity agreement. Eighty-three per cent of the increased trade is estimated to be on the Japanese side. That 83/17 balance is a pretty good result for the Japanese. This was a predictable result: we were the demandeur. There is a political need on the Government’s part, which I think they must be very wary of, to demonstrate that deals can be done and to claim that any deal is a great success. There is also the timing. It took forever to negotiate the EU-Japan deal—I think it started off when my noble friend Lord Mandelson was Trade Commissioner. This deal we achieved in four months, so it was never going to be a great advantage to us.

In future, we must be more strategic and less naive about trade. To again use a Brussels expression, we need to be much clearer about where our offensive interests lie in trade negotiations. What are we trying to achieve? Where are we going on digital issues? Where are we going on geographical indications? What is our aim in terms of attracting inward investment? We must have a clear strategic view of these questions rather than just ad hoc negotiation. The Government have not given enough attention to thinking about these issues strategically.

The other point, which is that of the committee’s report on the deal that we are discussing today, is that the quality of our debate about our future trade strategy depends on transparency from the Government—not secrecy, which is what we have had—about how the negotiations have gone. We need transparency and honesty. I see a crucial role for this House, because of our depth of expertise and the civilised way in which we conduct ourselves, in contributing to that public transparency, as the report from your Lordships’ committee has done. I very much hope that, in the review of our committee structures, which is ongoing today, we will continue to devote resources to such scrutiny because if we are not prepared to do it, I do not know who else will be.

United Kingdom Internal Market Bill

Lord Liddle Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[Lord Vaux of Harrowden (CB) [V]]

My Lords, I have added my name to Amendment 62A, proposed by the noble Baroness, Lady Bowles. We owe her our thanks for bringing this important wrinkle in the Bill to our attention. She and the noble Baroness, Lady Altmann, have already eloquently set out the reasons why this amendment is needed, so I will not detain the House for too long.

The Bill creates draconian powers of investigation for the CMA, with associated penalties which, as we have heard, are much more suited to its duties of investigating market abuse. Indeed, as the noble Baroness, Lady Bowles, pointed out, the wording has actually been lifted from those duties. However, the purposes of the investigation set out in this Bill are very different from market abuse investigations. In this Bill they are investigations into the impacts of regulations or provisions made by the various national authorities. Businesses are not in this case being suspected of, or investigated for, market abuse, yet the Bill will mean that they will have to respond to notices subject to penalty as if they were.

Even if we reluctantly accept that these powers and penalties are appropriate—and I do not—we must surely ensure that the powers, and in particular the penalties, do not become an undue or unfair burden on business. I listened carefully to what the noble Lord the Minister had to say in this opening speech, and I am afraid that I do not think that the protections and the consultations that he mentioned go far enough in this case.

While larger businesses may be able to cope with such an investigation, small companies do not have compliance departments or in-house legal teams. They do not have the excess capacity to be able to deal with such investigations. Even in normal times, these investigations would be burdensome for small companies, and it is even more the case when they are trying to recover from the Covid crisis and at the same face up to the challenges that leaving the EU single market will create. This is no time to load additional burdens on to small businesses. Therefore, I urge the Minister to accept this simple—and, I had hoped, uncontroversial—amendment, or at least to come forward with some protections for smaller companies, as has been suggested.

[Lord Liddle (Lab)]

My Lords, I very much welcome the opening statement from the noble Lord, Lord Callanan. I think he has proposed an improvement in the Bill, by adding further requirements for consultation with the devolved Administrations. That is for the good. I also have a great deal of sympathy with the amendment moved by the noble Baroness, Lady Bowles. I can see the argument that, if there are impediments to the internal market in a particular sector, the new body will require an information-gathering power, and if you have that power you have to have an enforcement power. It is welcome that the Minister says that these powers will be exercised in a voluntary and proportionate way. Yes, maybe—but I do think that there is a special concern about small businesses, to which I hope the Minister can find a way of responding positively in his reply.

I have to say—and I cannot resist the temptation to poke fun at the noble Lord, Lord Callanan, on this—that if such clauses had been proposed by the European Commission, we would have heard his screams of protest from the committee rooms of Brussels to the banks of the Tyne, which he represented, and he would have raised the roof on the wonderful auditorium of the plenary in Strasbourg. I can hear him now in excellent Brexiteer mode. Of course, now that Brexit has happened, these concerns are of no consequence. The truth is—and I think this is going to become clear—that for business Brexit means more and more bureaucracy, and this is what we are seeing in terms of the new customs arrangements and in terms of this Bill. There—I cannot resist making that point.

Having said that, there are many serious issues with this Bill. I regard it as a treaty-breaking, devolution-wrecking, United Kingdom-unravelling Bill. These are serious points for debate and many of the amendments we are considering this afternoon, I am afraid, contribute to those consequences. So I hope that a compromise can be reached on this matter before Third Reading and, on that basis, I will abstain in the Division.

[The Deputy Speaker (Lord Lexden) (Con)]

The next speaker on the list, the noble Baroness, Lady Neville-Rolfe, has withdrawn. I call the noble Baroness, Lady McIntosh of Pickering.

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[The Lord Speaker (Lord Fowler)]

My Lords, I have received requests to ask a short question from the noble Lord, Lord Liddle, the noble Baroness, Lady Finlay of Llandaff, and the noble Lords, Lord Fox and Lord Purvis of Tweed. I call the noble Lord, Lord Liddle, to ask a short question for elucidation.

[Lord Liddle (Lab)]

My Lords, I strongly support the Government’s levelling-up agenda but, having listened to the noble Baroness, they seem to have a fundamentally different approach to how this should be achieved from what has been a shared consensus for the last 20 years or so. We all thought the way to achieve levelling up, economic development and all the other things mentioned in Clause 42 was through devolution, bringing economic powers closer to the people. That was the logic of Scottish and Welsh devolution and the logic of the Chancellor of the Exchequer in the Cameron Government, George Osborne, who promoted the northern powerhouse, the Midlands engine and all the rest. The Government now seem to be saying, “We want to run the show centrally”. Is that so?

Do the Government not recognise that all this talk about the EU directing how the funds were spent is nonsense? I was very involved with the North West Development Agency; we directed how the funds were spent from that agency. Are the Government not proposing to weaken the powers that the devolved bodies have over structural funds? Finally, is it not the case, as I have been told—someone made a cursory reading of the Red Book—that next year the Government are allocating £220 million to the shared prosperity fund, which is a far lower sum than was available under the EU structural funds?

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

My Lords, I have received one request to ask the Minister a short question for elucidation, from the noble Lord, Lord Liddle.

[Lord Liddle (Lab)]

Can the Minister reflect a bit more on what he has just said about treating this issue as a matter for common frameworks? It sounded as though he wanted a co-operative solution to this problem, one that would bring all the devolved Administrations into a common framework. However, at the end, he said that it is not appropriate—but why not? He has not given a satisfactory answer to that question. I remember challenging the noble Lord, Lord True, in an earlier debate at Report, on whether the Government had changed their policy on common frameworks and were no longer taking them seriously. I got a very vigorous shaking of the head from the noble Lord, Lord True. Would this not be a perfect example of how common frameworks were still being taken seriously by the Government, and would it not resolve a real problem that the Government have had?

The Minister talked about unacceptable uncertainty, but frankly, the unacceptable uncertainty about state aid has come from this Government. Mr Dominic Cummings had one view of state aid, as against the traditional Conservative view. That is where the uncertainty came from. Now that he has gone and now that he is out, thank goodness, we have an opportunity to create a sensible common policy. There is a need for balance, and it must be sensible. The best way is through a common framework in co-operation with the devolved Administrations.

[Lord Callanan (Con)]

I am not sure whether that was a question or a speech in the wrong place—but I take the noble Lord’s point. I think he is getting issues conflated. The common frameworks programme of course is a programme of work with diffuse levels of power and ultimately it is not clear where regulation lies. To resolve those matters on a cross-UK basis, there is no doubt in our mind where the proper operation of these powers is—state aid, or rather subsidy control, is a reserved matter for the UK Government. However, we have said that we want to work collaboratively. We want to work with the devolved Administrations and of course, as we have said, we will consult closely with them on any new policy that we develop and indeed on whether legislation is necessary. But, given my general support for the framework and the Government’s support for the framework programme, I do not believe that it is appropriate for this matter to be included in the framework programme.

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.

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[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.

United Kingdom Internal Market Bill

Lord Liddle Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Wednesday 18th November 2020 Lords Chamber

[Lord Liddle (Lab)]

My Lords, first of all I say how much I agree with what the noble Lord, Lord Cormack, has said about how we should organise our affairs. We have to bring back genuine debate to this Chamber, and I hope that those responsible will take on board what he has just spoken about.

Secondly, I had prepared what I thought was an extremely well-argued speech on the subject before us today. However, having listened to far more eminent figures than me talk about the need for these common frameworks, I am not going to deliver it. All I will say is that the noble and learned Lord, Lord Hope, in opening the debate, spoke with a sharpness, a forcefulness and a logical directness that the Government would be well advised to take into account.

I have a couple of questions for the Minister because I think political questions arise from this discussion. First, does he acknowledge that the Government have changed their policy on these common frameworks since 2017-18, and why? It is clearly the case that there has been a change of policy and that Theresa May, in her commitment to “our precious union”, as she put it, saw the dangers that Brexit would pose to the devolution settlement and tried to find a consensual way of resolving them. David Lidington, with the help of people such as the noble Lord, Lord Dunlop, came up with this concept of common frameworks as a way of doing this.

Why, in this Bill, if the Government have not changed their policy on these common frameworks, can they not find a place for them in the legislation? What is the objection to actually acknowledging their existence to balance the abstract principles of mutual recognition and non-discrimination, which every single lawyer in this Chamber tells us will override the practical effect of these common frameworks? Why do the Government not come clean about this? Why do the Government not admit that what they actually want is to take power to the London Government to get their way on whatever they want in this area, rather than using the bottom-up, consensual approach that David Lidington and the noble Lord, Lord Dunlop, put together in the passage of the EU withdrawal Act? I think the Government should do that because we are marching into very dangerous territory for the future of our United Kingdom.

I remember that the noble and learned Lord, Lord Hope, in his speech in Committee, argued that common frameworks were consistent with the principles of subsidiarity and proportionality that had been underlying principles of the European Union in this area of law. The noble Lord, Lord Callanan, said in response, “Well, those are European principles. We have now left the European Union; we don’t have to follow them anymore”. What principles are the Government following? What is the Government’s vision for the future of the United Kingdom now that the Prime Minister has described devolution as Tony Blair’s biggest disaster? Will he please set out to us what is his vision of the balance of relationships between the devolved nations? We are really getting into very dangerous territory.

I hope that we can somehow rescue the situation by getting these common frameworks back. If we do not, I hope that my party will press the case hard for a major constitutional convention on the future of the United Kingdom. It seems to me that unless we provide that credible alternative, the nationalists in Scotland will break up what has been one of the greatest ventures in history.

[Baroness Noakes (Con)]

My Lords, I start by saying how much I agree with what a number of noble Lords have said about the nature of debate in this sterile House, and I hope that we can certainly move on. I think it is important to say that because, as noble Lords might expect, I am not going to be saying much else which will find favour with other noble Lords who have spoken in this debate.

I respect the concerns about protecting the powers of the devolved Administrations which lie behind the amendments in this group, but I believe that these amendments would not be helpful in the context of the internal market and might well be very harmful. There is no exact correlation between what the common frameworks cover and the UK’s internal market covered by the Bill. Indeed, the functioning of the internal market is only one of six objectives of the common frameworks programme. Not every common framework will have a UK internal market dimension, and not every aspect of the UK internal market is included in the common frameworks programme.

So if Amendment 1 is agreed to, we will have uncertainty from day one about which bits of the common frameworks would override the market access principles. Uncertainty kills businesses. Uncertainty might be resolved only by the courts, and that could take five, maybe 10, years to bring to conclusion. Businesses cannot in general cope with timeframes of that nature, and that is especially true in today’s lockdown-harmed business environment.

The common frameworks are by their very nature detailed and specific. They are practical solutions to well-defined problems, such as compliance with international obligations. They do, however, have two big weaknesses. First, they have no guiding star, or no guiding principle, and they cannot, by their nature, cope with future change. By contrast, the internal market enshrined in the Bill is based on the overarching and enduring principles of market access, namely, mutual recognition and non-discrimination.

I am very clear that businesses want the Government to deliver an internal market which has as few barriers to trade as possible. They do not want to have to master thousands of pages of common frameworks, which may or may not impact the internal market, just to do business 10 miles away if that is over one of the UK’s internal borders. I have to say to the noble Baroness, Lady Randerson, that I have never even heard of the Aldersgate Group she referred to as representing business opinion, and I do not believe it represents the opinion of the whole business community.

In Committee, I urged noble Lords to consider the provisions of the Bill through the lens of businesses and individuals who will be trying to live, work and trade within the United Kingdom—that is what the Bill is about. By viewing the Bill through the lens of what the devolved Administrations think they might lose in terms of devolved competence, I believe that they may end up inflicting acts of self-harm on the people and businesses in their own territories.

I remind noble Lords of the high degree of dependence of the devolved nations on trade with other parts of the United Kingdom. This is an issue for Scottish businesses and residents, Welsh businesses and residents and Northern Ireland businesses and residents. It is important but not such a big issue for English businesses and residents. If trade is made more difficult, the result, as night follows day, will be higher cost and less choice for consumers. At a time of economic stress, that does not seem a sensible route to follow.

I have heard many arguments of principle adduced by the supporters of the amendments, but I have heard less about the practical issues. We heard about Scottish concerns on minimum alcohol pricing, but that was debunked in Committee. I believe that building regulations are a new red herring that has been introduced and will not conflict with the Bill. The Bill does not outlaw every variation within the UK, as some have tried to suggest. More importantly, I am still waiting to hear what will make life better for the businesses and residents of the devolved nations if the amendments are passed.

More than 90% of UK small and medium-sized enterprises, and nearly 60% of large businesses, trade only within the UK. That is the scale of the issues we are facing with the amendments. I hope that noble Lords will not jeopardise the aims of an internal market which works for the whole of the United Kingdom by pressing the amendments.

Common Rules for Exports (EU Exit) Regulations 2020

Lord Liddle Excerpts

Tuesday 10th November 2020 Grand Committee

[Lord Liddle (Lab) [V]]

My Lords, I do not believe that I have yet spoken in a debate being replied to on behalf of the Government by the noble Lord, Lord Grimstone. I welcome him to his role—although he has been there for some time. I see him as a very capable and grown-up figure. I wish that could be said of the rest of the Government in which he serves.

I am speaking in this debate because I am a member of the Secondary Legislation Scrutiny Committee and this measure came before us a couple of weeks ago. In terms of Great Britain, it seems a perfectly sensible amendment of retained EU law. There is however some uncertainty, which is why I am speaking today, about its implications for Northern Ireland.

Perhaps I may quote from the 29th report of your Lordships’ Secondary Legislation Scrutiny Committee. Paragraph 7 states:

“While we note the Department’s explanation that the Commission could impose export controls or restrictions on Northern Ireland only in very limited circumstances, such as in relation to the movement of endangered species, it is not clear what other circumstances may allow the Commission to exercise its powers. These are issues that the House may wish to explore further, given the sensitivities around future trade between Northern Ireland and the rest of the UK.”


That is why we drew the regulations to the special attention of the House.

We have already had a rather shameful episode, in my view, where the Government signed up to the Northern Ireland protocol and then, when they considered it in more detail, decided that they did not like its terms. As a result, they attempted something which, as we saw in the Divisions last night, this House regarded as a gross breach of international law to change provisions of the protocol which they did not like. What I am seeking today is an assurance as to what exactly are the circumstances in which this bit of EU law will apply in Northern Ireland, and whether the Government will give an absolute undertaking that they will not seek in any future piece of legislation to override these provisions. Given what we have seen in the last year, I think that is a perfectly reasonable request.

The Minister rightly drew our attention to article 6 of the protocol—I have it open in front of me. He quoted point 1 of article 6, which says:

“Nothing … shall prevent the UK from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.”


It goes on to say that any measures which

“restrict the exportation of goods shall only be applied to trade between Northern Ireland and other parts of the United Kingdom to the extent strictly required by any international obligations”—

[Lord Parkinson of Whitley Bay (Con)]

I am sorry to interrupt the noble Lord but the time limit for speeches in this debate is three minutes.

[Lord Liddle (Lab)]

That is even given the very few speakers in the debate, which I do not understand. I will sum up in a moment. So, the protocol speaks of

“the extent strictly required by any international obligations of the Union”,

but it goes on to say that, despite Northern Ireland’s integral place in the United Kingdom, the applicable EU legislation would apply in Northern Ireland. What would that mean?

[Lord Parkinson of Whitley Bay (Con)]

I am sorry to interrupt the noble Lord once again but we are very tight on time. I am afraid the noble Lord will have to conclude his remarks.

[Lord Liddle (Lab)]

I conclude my remarks, but I hope that we do not get into legal problems similar to those we have seen already.

United Kingdom Internal Market Bill

Lord Liddle Excerpts

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

[Lord Liddle (Lab)]

My Lords, this is a very interesting debate to join. It is a pleasure to welcome the noble Lord, Lord Callanan, to his place, as it were, once again defending an extremely complex and difficult piece of legislation. I hope he will give pretty comprehensive answers to the points raised by my noble friend Lord Rooker, the noble and learned Lord, Lord Hope of Craighead, and the noble Lords, Lord Purvis and Lord Inglewood, because they all had great merit.

I spoke at Second Reading but was not able to attend the first day of Committee because of commitments in Cumbria. In all the furore about the unconstitutional and completely unacceptable clauses of the Bill, the Government have got away with the rest of it, which may not be unconstitutional but is certainly unacceptable. Therefore, this House should expose it to very critical scrutiny.

We need clarification—this is where my noble friend Lady Hayter’s amendment is so important—in very simple and clear language of what the Government mean by mutual recognition and how this will work out. The idea of mutual recognition was an important foundational principle in the history of the European Union and the single market, but only because mutual recognition without anything else is a weapon that results in a race to the bottom. In the single market White Paper put forward by Jacques Delors in the early 1980s, the whole point was that you had to have common standards and harmonisation in a list of certain areas—I think there were 300—to go alongside the principle of mutual recognition.

I have two points to make on this. First, on the position of the devolved authorities and the nations of Britain, do the Government recognise that an essential principle of devolution is that diversity and experimentation are good things, and that it is therefore important that in a devolved settlement the devolved nations should be able to experiment with setting standards in the areas of public health, environment and consumers? This is part of the point of devolution. It is not something the UK Government should seek to prevent. It is very important that the Government make clear their support for the principle of devolution and diversity.

My second general point is the one to which the noble and learned Lord, Lord Hope, drew attention in his support for my noble friend Lady Hayter’s probing amendment: why do the Government include in their general principle this business of goods being imported into the United Kingdom? Does this essentially tell the devolved Administrations that, in any trade agreement that the UK Government negotiate, they will have no say over the standard of goods coming into the UK and would have to accept them whatever they thought about their compatibility with their own aspirations to set standards? That seems to me a fundamental point that needs an answer. This legislation is deeply complex, but we need clarity from the Government on fundamental points.

[Lord Fox (LD)]

My Lords, this has been a relatively short debate in terms of the Bill so far, but it has raised some fundamental issues which beg some quite deep and considered answers from the Minister.

When the noble Lord, Lord Inglewood, brought up Cumbrian cattle-driving and we had the noble Lord, Lord Liddle, to follow, I felt we might have had quite a long discussion around that, although we did not. The noble Lord, Lord Inglewood, in characterising Defra as an English department, brought out the Janus face Secretaries of State have in being not only Secretary of State for the United Kingdom but in most cases also Secretary of State for England. Herein lie some of our problems and uncertainties.

The noble Baroness, Lady Hayter, set out and explained very well the issues surrounding mutual recognition. In the noble Lord, Lord Rooker, this House has the benefit of someone with fantastic knowledge and it is important to listen to him. Animal feed is an important area, although it is not always clear. If I may beg your Lordships’ indulgence for a short anecdote, in the mid-1970s our farm was subject to one of the small outbreaks of anthrax, which is very rare—I found the animal that died of it, and it was not a pretty sight. We were put into quarantine—something like lockdown—and it was tracked down to the importation of cheap beans from India. That is why the control of animal food in this country is really important.

In terms of animal feed on the island of Ireland, I was struck that the Government have already exempted the electricity market there—the Minister and I debated this on a statutory instrument—from the overall UK market. They have done that because of the integrated nature of electricity on the island of Ireland; it is an entirely sensible move, of which we approve. It seems to me that animal feed is very similarly integrated and would benefit from a similar island-of-Ireland-wide process. The Minister might like to think about that going forward.

As usual, the noble Baroness, Lady McIntosh, asked a series of excellent and important questions. We need answers to them to understand the objectives of the Bill.

In Amendment 21, the noble Baroness, Lady Finlay, seeks what I think many of us seek to do: to look at this, as somebody mentioned, through the other end of the telescope. This is turning things upside down. Why do we not start with the common frameworks and what is currently working around the devolved authorities and legislate only what needs to be done to create the market we all want? My noble friend Lord German’s twin-track, two-road approach is a very good example. Where is the gap? How do these twin tracks come together? There is no explanation anywhere of how the common frameworks and the Bill are supposed to work together. The only conclusion I can draw is that the common frameworks are allowed somehow to dwindle, because the Government seem to be putting an enormous amount of energy into the Bill.

As usual, the noble Baroness, Lady Noakes, is right: we need to facilitate trade and make it as frictionless as possible across the UK. It is a shame we cannot make it frictionless across the whole of the European Union. The fact is, we have devolution, and the internal market Bill must respect that. At present, it seems that it does not. The noble and learned Lord, Lord Hope, made this point very ably.

As usual, my noble friend Lord Purvis came up with a series of important questions, including Scotch whisky-based ones. He came up with the revelation that there is a complete and absolute internal contradiction in the Bill. The Government brought forward an amendment that causes the following to happen: if England decided to set up its own approval system and started approving active chemicals banned in the EU, Scotland could refuse them. Conversely, Scotland could presumably go further than the EU ban and ban substances which England approved. That is the Government’s position, based on an amendment they brought to the Commons. However, he Minister has said that we must stop this happening, and that the Bill will do that. Something is not right, and the Minister needs to explain what is wrong.

The telling point made by my noble friend Lord Purvis and other noble Lords, including the noble Baroness, Lady McIntosh, is that without clear definitions, it will not be the Government causing the race to the bottom—it will be companies taking this to the courts. That is why we expect from the Minister a very detailed answer to these important questions.

--- Later in debate ---

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am interested to know why the Minister felt that these amendments needed to be moved at this time; what provoked that? Furthermore, who decides—and in what circumstances—what is a hypothetical sale, as opposed to a real sale?

[Lord Liddle (Lab)]

I have no wish to add to the general confusion.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the Minister for clearing this up, because any confusion beforehand may be ongoing. Since he was so clear, perhaps he will not mind my asking a couple more questions.

As the Committee knows, I live on the border, and some of these things are very relevant for traders, especially rural traders living on either side of the border. When I was a Member of the Scottish Parliament, one of the big areas of debate when minimum unit pricing was introduced was the concern about the cross-border selling of alcohol, which avoided the decision being made in Scotland concerning the price of that alcohol. This is not hypothetical; these were real sales. It did not apply to the more expensive malt whiskies et cetera. The minimum unit pricing of alcohol was, by and large, about the low-value alcohol which could be brought across the border in large quantities to be sold in Scotland. That was a valid issue, and a key area of consideration when it was debated by the European court. The justification, which the ability of the public authorities to prevent that happening relied on, was that this was against market access principles but justified on public health grounds. The Government have chosen not to do this, so they will be relying on the market access principles.

Can the Minister clarify something that I genuinely do not know? I am not trying to catch him off guard. On the sale areas of goods, does the Bill permit alcohol for use within Scotland to be sold in Scotland on English grounds? Can alcohol be sold in Scotland by using mutual recognition, to avoid the minimum unit price stipulated for alcohol that is then sold in Scotland? I have a fear that it may be. It will be reassuring if the Minister indicates that this is not the case, because Clause 13 is about the sale of goods complying with local law and states:

“Nothing in this Part prevents goods produced in or imported into a part of the United Kingdom from being sold in another part of the United Kingdom if … the sale complies with any requirements applicable in that other part of the United Kingdom”.


Therefore, if we say that, rather than biscuits, it is gin or vodka, and a policy has a direct impact on the price of that gin or vodka because of the Scottish legislation, then Clause 13 suggests that if that alcohol was brought over from Northumberland and sold in the borders, the selling of it to a wholesaler within the borders would have to be done as if it had taken place in Berwick, Northumberland.

I ask this because there is currently a lot of cross-border trade in agricultural business. Many Scottish producers will sell livestock at the Wooler market in England. A lot of this is happening. It has been worked through with regard to the different agricultural standards. Therefore, I am anxious that Clause 13 could inadvertently be used to bypass what are correct elements.

This leads me to my final question. We will come to the definition of “goods” and “sale” with Amendments 66 and 67, but there is nothing in the definition of “sale”, or the other parts of the Bill, relating to the price. If policies are in place which directly impact on the price of an item to be sold, rather than standards, labelling or marketing, is price also considered within that? I would be very grateful and give him top marks if the Minister can answer those questions clearly.

--- Later in debate ---

[Lord Liddle (Lab)]

My Lords, we have heard many excellent speeches in this short debate, and I agree in particular with what my noble friend Lady Andrews has said.

I am a member of the Secondary Legislation Scrutiny Committee. The committee shares many of the concerns expressed by the Delegated Powers Committee in its report. However, I would somewhat disagree with the strictures of the noble Lord, Lord Thomas of Gresford, on the behaviour of Her Majesty’s loyal Opposition. We have to be considered and careful about using fatal Motions, but to my knowledge it is certainly not Labour’s position that those fatal powers should never be used.

On the substance of the Trade Bill, the Agriculture Bill and the immigration Bill, I had assumed that the Government are putting extensive delegated powers into the legislation basically because they do not know what their post-Brexit policy is going to be—they do not really have a clue. For instance, they do not have a clue about what national strategy we are going to pursue on trade. Will it be one that maintains our high standards, or will it be one that tries desperately to get trade agreements with the rest of the world that lower standards in order to open markets in the hope that that will compensate for the loss of market access in Europe? I think that the Government do not know. There are deep divisions inside the Conservative Party on where the Government should go on these questions, so the simple thing to do is to put a lot of these policy decisions into delegated powers which Ministers will have to decide on at some future point.

However, in this Bill, I am concerned for a quite different reason: in this case the Government know only too well, in particular on the clauses on the Northern Ireland protocol, what they want to do with the powers that they would have. If we cannot remove those offending Northern Ireland clauses from this Bill, then if delegated legislation comes to this House based on them, we should vote against it every single time, because that is clearly unconstitutional and it would be perfectly within the powers of this House so to do.

--- Later in debate ---

[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 Liddle Excerpts

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

[Lord Liddle (Lab)]

My Lords, it is an inestimable pleasure to congratulate my noble friend Lady Hayman on her maiden speech. We go back a bit of a way. We were both freshers—if that is the right term—in the Cumbria Labour group when it was first elected in May 2013. That is a forum of plain-speaking common sense which I would recommend to some of our national politicians. Together, as we are now in this place, I hope that we will speak up for the north and for Cumbria and its very special concerns—alongside, of course, many other Peers in this place, including my noble friend Lady Hayman’s predecessor-but-one as MP for Workington, my noble friend Lord Campbell-Savours.

My noble friend Lady Hayman—Sue—made a distinctive mark in the Commons. She led the Opposition on environmental and rural affairs, and she thought deeply about the issues. In a Labour Party that was going through a very difficult patch—to put it mildly—she was a voice of quiet calm and reason. It is great—my wife, for one, will be pleased—that she is going to take up again her involvement in the parliamentary choir.

In last December’s general election, so-called Workington Man assumed a mythological status as driving a huge breach in what used to be Labour’s “Red Wall”. I see my noble friend Lady Hayman as a fine and, I believe, more lasting example of Workington Woman, with an instinctive feel for progressive values, a deep concern for the underdog, and a practical passion to secure reform and change. What is more, she is a very decent human being, so I congratulate and welcome her.

I will speed up, I hope, on today’s issue. We are not supposed to be talking about Brexit. People say Brexit is all over. Well, it is, sort of—and of course I accept the result of where we are. But it is because of the Brexit we have chosen, as the noble Lord, Lord Clarke of Nottingham, pointed out, that the Government have got themselves into this very considerable difficulty. Although you can say that the debate about Brexit is over, the consequences of Brexit—not just the economic consequences, which I think are going to be bad; worse than Covid, according to most independent assessments—are going to affect our politics and dominate it, perhaps for years to come.

This Bill is a dramatic blow to Britain's standing in the world. The very act of tabling it has done incalculable damage to our international reputation, and, as the noble and learned Lord, Lord Judge, said, we are now dependent on our soft power for influence. Why has it been done? The proposal for a revised Northern Ireland protocol was put to Brussels by Boris Johnson himself after his walk in the park on Merseyside with Leo Varadkar last autumn. It was the key to having a different withdrawal agreement that he could then get through Parliament. Are we to assume that he never read the provisions of the protocol that he signed or that Michael Gove did not read them on his behalf?

I believe that, by the time we get to Report, these provisions may have been dropped. That is what I very much hope. I think the Government will use the excuse of a skinny trade deal to drop them. However, my fear is that this will not resolve the problem. Trade across the Irish Sea will muddle on for now, but that is only because our rules and standards are presently fully convergent with the EU’s. However, for this Government, the whole point of Brexit is to diverge from EU rules. That will cause great difficulty as time goes on and it has dangerous potential to undermine the Good Friday agreement.

As my noble friend has said, this puts into question the future of the United Kingdom. Furthermore, if I were a Scottish MSP, I would vote to refuse legislative consent to this measure on the grounds that they override the devolution settlement. What we are looking at today is a profoundly dangerous Bill, and this House has constitutional responsibilities to reject the parts of the measure that contradict the manifesto on which the Government were elected and that breach international law. I hope the Lords will neuter it and then stand their ground.

Rolls-Royce

Lord Liddle Excerpts

Wednesday 14th October 2020 Lords Chamber

[Lord Callanan (Con)]

We are happy to support good R&D projects. Rolls-Royce is a major beneficiary of our R&D support operations through the £1.95 billion Aerospace Technology Institute programme. It is also one of our largest UK investors in R&D.

[Lord Liddle (Lab) [V]]

My Lords, I was working for my noble friend Lord Mandelson in 2009 during a similar economic crisis when, as Secretary of State for Business, he secured assurances from Rolls-Royce that the establishment of the plant in Singapore would not lead to closure of the UK plant at Barlick or severe job losses. Given the crucial importance of Rolls-Royce to the British economy and the financial links between the Government and the company, why has the Secretary of State not made a personal intervention to save the Barlick plant?

[Lord Callanan (Con)]

The plant is not closing. Rolls-Royce has made it clear that it sees it having a long-term future and will continue to invest in it. However, we have to understand the context: the Covid-19 pandemic has dealt it a devastating blow. In its first half-yearly results, Rolls-Royce announced that the company’s revenue fell by 24% to £5.6 billion, while for civil aerospace, the area in which it operates, revenue fell by 37%. This is a devastating time for many companies, including Rolls-Royce. We are doing all that we can to ensure that it survives the pandemic and can go on to generate secure, well-paid jobs in the future.

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

Lord Liddle Excerpts

Wednesday 15th July 2020 Lords Chamber

[Lord Liddle (Lab) [V]]

My Lords, I am a strong believer in the virtues of competition and an open economy. I was alarmed to hear of the resignation of the noble Lord, Lord Tyrie. I would like the Minister to follow up on what the noble Lord, Lord Adonis, said.

I am also, and have always been, a long-term sceptic about the so-called free market in corporate control. There seems to be very little evidence of mergers bringing long-term benefits, except for those who take fees from them and for senior managers who benefit from inflated share prices. I support policies that throw grit in the wheels of the M&A process, such as restricting voting rights to long-term shareholders.

There are also public interest arguments where interventions by government can be justified on specific grounds. That is why I support these measures, but with some important qualifications. First, ministerial interventions must be transparent and on the basis of clear criteria, with a published assessment of the reasoning and an assessment of costs and benefits. The Huawei affair has strengthened my scepticism about ministerial interventions. Secondly, this needs a new, strong public body that is independent of Ministers to advise on the public interest. Thirdly, employees should have stronger rights in these circumstances. Fourthly, when we take action on public interest grounds, I urge us to act in concert with our European friends; otherwise, Britain could easily end up the victim of retaliation.