United Kingdom Internal Market Bill

Lord True Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Wednesday 9th December 2020 Lords Chamber

1A: Because they will create legal uncertainty, which would be disruptive to business.

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

My Lords, I think I was on mute for a minute there.

[Lord Adonis (Lab)]

Keep it up.

[Lord True (Con)]

The noble Lord, Lord Adonis, says, “Keep it up,” which I know is a sentiment widely shared.

Noble Lords have been clear throughout this debate on the UKIM Bill about their support for the common frameworks programme. I and the Government concur with those sentiments, and I reiterate the Government’s continued commitment to this programme. I am pleased to update your Lordships’ House that common frameworks are developing well, with three common frameworks currently undergoing scrutiny, including in this House’s committee chaired by the noble Baroness, Lady Andrews—and I pay tribute to the work of that committee.

Out of 33 active frameworks that we have assessed are needed, we expect 30 to be agreed by the end of 2020, mostly on a provisional basis, pending scrutiny by Parliament and the devolved legislatures. The common frameworks programme embodies the value of strong intergovernmental relations. The UK Government and the devolved Administrations are working together, on a voluntary basis, in support of cohesive policy-making and the maintenance of high standards in respect of the specific needs of each part of the United Kingdom. While recognising this positive collaboration, we also need to acknowledge that the common frameworks were always intended to cover only a specific set of issues where powers are returning from the EU. Common frameworks support the functioning of the internal market but cannot by themselves ensure regulatory coherence across the whole UK internal market—the key objective of this Bill.

As the Government have noted previously, we regret that the Scottish Government walked away from the joint internal market workstream in spring 2019. Detailed engagement has been ongoing with the Welsh Government and Northern Ireland Executive on this Bill, and the door remains open to the Scottish Government to join similar discussions. The strength of common frameworks lies in the fact that they provide a forum for discussion and collaboration, with a clear process in defined, but limited, areas of economic activity.

I thank the noble and learned Lord, Lord Hope, for his thoughtful participation in these debates and his considered amendments to the Bill, which he has now partly revised. I welcome also the willingness of the noble and learned Lord to continue engaging in discussions on his amendment with my officials, and those discussions may continue. I also thank noble Lords opposite for their own positive and practical engagement on these matters. Discussions are not exhausted on this topic.

On the amendment before us, I have cautioned your Lordships’ House before, regarding the previous amendments of the noble and learned Lord, Lord Hope, that this would lead to the automatic disapplication of the market access principles, creating a very broad exclusions regime, with the attendant risk of legal uncertainty for businesses and consumers over whether or not market access principles apply. It is the Government’s view that these revised amendments carry similar risks, both in terms of the breadth of the exclusions regime created and in terms of uncertainty. As to the latter, there is no safeguard against different Administrations attempting to implement different interpretations of an agreement into law, potentially leaving the courts in the unenviable position of adjudicating on these different interpretations. That would potentially invite the courts into the common frameworks process, which is inherently undesirable. Any such litigation would create great uncertainty for businesses. This is clearly not in keeping with the need to provide certainty and a stable trading environment for citizens across our United Kingdom.

Moreover, Amendments 1B and 1C prevent the introduction by a UK Government Minister of any new regulations in any area where discussions under the common frameworks process are ongoing. This could mean Ministers would be unable to act, even if there were an urgent need to do so.

Furthermore, the common frameworks programme was established in 2017 to manage the powers returning from the EU in devolved policy areas. In line with its voluntary nature, the programme has not been put into legislation, although I recognise that it is alluded to, in very high-level terms, in Schedule 3 to the European Union (Withdrawal) Act.

While it is a key objective of common frameworks to agree consistent regulatory standards, in practice there may be cases where divergent approaches could be agreed through a common framework. If this were to occur, and if any such divergence were to fall within the scope of the market access principles, we should be in no doubt that the market access principles set out in the United Kingdom Internal Market Bill would apply. That means that even if divergence is agreed in a particular case, it would not prevent businesses from other parts of the United Kingdom being able to sell their products into the relevant place. This would ensure that barriers to trade are not erected through the introduction of divergent policy.

We must also bear in mind that common frameworks are jointly owned by the devolved Administrations. Any proposal to legislate them into this Bill would need to take into account their involvement in the programme. While we have carefully reflected on the arguments made in both Houses, I respectfully suggest that the approach put forward in these amendments brings significant drawbacks to the Government’s ability to provide businesses with the certainty they need to operate across the United Kingdom.

I and colleagues across government look forward to discussing further with our partners in the devolved Administrations and devolved legislatures to consider how we can capitalise on the ways of working agreed through common frameworks. We are also working towards concluding a joint review of intergovernmental relations with the devolved Administrations. These future intergovernmental structures will create a system that secures strategic co-operation and proactive discussions on shared areas of interest, including on common frameworks. The aim of any reform will be to establish an adaptable and effective system of governance that facilitates building long-term trust between the Governments.

We are, of course, open to considering how to put these areas of co-operation on a sustainable footing for the longer term, complementing the IGR review and the market access principles to the benefit of citizens and businesses. I beg to move.

Motion A1 (as an amendment to Motion A)

Moved by

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[Baroness Hayter of Kentish Town (Lab)]

My Lords, the noble Lord, Lord Callanan, who is not in his place, will recall how the notion of common frameworks evolved. When we were doing the first EU withdrawal Bill, it became clear that some of the powers returning from Brussels clearly fell within devolved competences. It was therefore widely understood that, to facilitate trade throughout the UK—as otherwise the rules affecting trade could vary across internal borders—a coming together of the four authorities would be needed to balance the desire for, and attraction of, diversity on some issues with a UK-wide approach to help consumers buy and manufacturers trade throughout the UK.

From the start, it was agreed that such frameworks would be established where needed—this is from the communiqué of October 2017—to

“enable the functioning of the UK internal market, while acknowledging policy divergence”

and that they would

“respect the devolution settlements … based on established conventions … including that the competence of the devolved institutions will not normally be adjusted without their consent”.

That was how they started. At that point, a list of 24 such topics was identified and, with a lot of good faith and hard work—as the Minister has acknowledged—the initial three Governments, along with Northern Ireland officials, set to work developing frameworks to enable that UK-wide market to flourish while recognising where devolved authorities might want variations for whatever reason. The basis was, to quote again from that document signed by the Government, to

“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory”.

Until this Bill arrived, everyone thought the system was working well and would accomplish the aims set for it. This should have been something for the Government to celebrate, as they have today, and build on. In fact, it has never been necessary for the Government to use their powers to freeze any devolved authority’s power—a provision set into the EU withdrawal Act, as the Minister has acknowledged.

While this Bill was anticipated, the expectation was that it would help build a new, in some ways unique, internal market across our four nations, which have different cultural, linguistic, agricultural, geographical and industrial histories and realities. Above all, our nations have different democratic governance structures from when we ceded rule-making to the EU in 1973. We thought the Bill would respect the devolution realities while helping to ensure the UK market could prosper for the sake of business, consumers, workers, our agriculture and the environment. As we now know, in addition to throwing the quite unnecessary Part 5 grenade into the Bill, the Government pulled the pin on another grenade by writing into the Bill market access rules which trumped, rather than solidified, the common frameworks programme, which is an approach built on consensus rather than top-down diktat.

The noble and learned Lord, Lord Hope, is not a revolutionary. He is not trying to rewrite the Bill. He is seeking—rather like the Minister himself through the Government’s welcome amendments on regulation-making, for which we will give thanks when we come to them later—to start the process on the basis of consent across the four devolved authorities, and, where that is not possible, leaving it to the UK Parliament, rightly, to legislate. We support a union, and therefore we support Parliament’s right at that point to have its proper role. But we start with consent, and then move to Parliament. What we do not support is starting here in Parliament and government, rather than with the four-party common frameworks. So, we welcome the noble and learned Lord’s upending of the procedure, starting with common frameworks and, where or if those do not work, using the market access approach of the Bill in areas obviously otherwise within devolved competencies.

I think we would all warn the Government to be very careful about clawing back decisions from our now quite long-established devolved settlements. I find today’s vote in the Senedd, by 36 to 15, to deny legislative consent to this Bill extraordinarily regrettable. It is an important Bill; it is not a small one. That was denied because of the message sent to Wales and the other devolveds by the rejection in the Commons last night of this approach. So we need a backstop for any failure to agree, but we fail to understand that what should be a backstop has become the starting gun.

The amendments in the name of the noble and learned Lord, Lord Hope, build on the devolution settlements and would support and strengthen the union, as well as creating what we all want: a successful, growing internal market, which is in the interest of all our citizens. We are right, as my noble friend Lord Adonis said, to ask the Government very genuinely to think again about the mechanisms—because that is what we are discussing—to achieve what I think we all want.

The noble and learned Lord, Lord Hope, said that if there was a will on the Government’s part to make the common frameworks system work, a solution could be found. Along with the noble Lord, Lord Fox, we concur with that view, and we welcome the Minister’s saying that “discussions are not exhausted”—I think I have his words right. Whether we do that by recognising the framework system in some way, extending the freeze provisions when they expire or pausing market access for a period of time while the four Governments talk—as mentioned by my noble friend Lord Adonis—there is surely a way forward. But I believe we need this amendment to get the Government to continue to discuss, so that we can get that way forward. That is why we will support the noble and learned Lord, Lord Hope, when he calls for a vote shortly.

[Lord True (Con)]

My Lords, I am grateful to all those who have contributed to this short debate and for the general tone of the interventions made. I was of course intrigued by the noble Lord, Lord Adonis, who emerged as a tribune of the people in this august senatorial assembly with his powerful oratory—a latter-day Gaius Gracchus, who said that your Lordships should reject everything sent to us by another place as a constructive contribution to law-making. I would respectfully give to the noble Lord, and indeed to any others who may share his views, the advice I would give to an overweight gentleman like myself: rejecting some of what is set before you, whether it is legislation or food, may well be desirable from time to time, but to reject everything is not conducive to the health of the legislature or of an individual. I hope that rather “Radical Jack” approach will not carry too much weight on the Opposition Benches.

I preferred the broader tone of the debate, which, as I heard it, actually reflected this Government’s resolve and the resolve of the parties represented in this place, at least—I cannot speak for down the Corridor: that all of us are committed to the security and future of this great union, to the common frameworks process and, as part of that, to hopefully developing further the next stage of inter-governmental relations, as I have explained to the House during the course of this Bill.

This Bill, however, works in tandem with the common frameworks programme by providing a broad safety net and additional protections to maintain the status quo of seamless intra-UK trade across all sectors of the economy, and there ought to be agreement on that in your Lordships’ House. It will ensure maximum certainty for businesses and investors, both domestic and overseas. I agree with what my noble friend Lord Naseby said from his perspective and experience in business. I am sure all noble Lords at heart support that objective and understand the need for a coherent internal market.

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14A: Because they were consequential upon Lords Amendments Nos. 42 to 47 and so the changes they made are no longer needed as a result of the Commons disagreement to Lords Amendments Nos. 42 to 47.

[Lord True (Con)]

My Lords, it seems that I am muted again, but I will find my way to the right spot. I turn now to Part 5 of the Bill. These clauses, as your Lordships may be aware, have been the subject of much debate here and in the other place.

Noble Lords will have seen that the Government announced yesterday that they have reached agreement, in principle, on all of the issues in the UK-EU withdrawal agreement Joint Committee. The Government have been clear throughout that they are committed to implementing the withdrawal agreement and the Northern Ireland protocol. We said that when the Bill was introduced to Parliament and have done so at every stage of its passage. We are also clear that, as a responsible Government, we could not allow the economic integrity of the United Kingdom’s internal market to be compromised inadvertently by unintended consequences of the protocol. That is why, through clauses in this Bill, we have sought limited and reasonable steps to create a legal safety net by taking powers in reserve whereby Ministers could guarantee the integrity of our United Kingdom and ensure that the Government are always able to deliver on their commitments to the people of Northern Ireland.

We sought these measures to guard against the possibility of not reaching agreement with the EU in the Joint Committee. As we have now reached agreement with the EU, I am pleased to say that the clauses which provided for the safety net are no longer needed and the Government are content for them to be removed from the Bill. I refer to Clauses 44, 45 and 47.

[Noble Lords]

Hear, hear!

[Lord True (Con)]

However, as I said in Committee, the clauses that provide for the safety net are not the only ones that make up this part of the Bill. It is vital that the other clauses are passed so that we can deliver on our commitments to the people of Northern Ireland. The protocol is clear that Northern Ireland is part of the UK customs territory, while our manifesto is clear that we would maintain and strengthen the integrity and smooth operation of our internal market. Clause 42 delivers on that commitment by ensuring that all authorities must have special regard to the following fundamental matters when exercising functions that relate to the implementation of the protocol on the movement of goods within the United Kingdom.

The first is the need to maintain the integral place of Northern Ireland in the United Kingdom’s internal market. The second is the need to respect Northern Ireland’s place as a part of the United Kingdom’s customs territory, while the third is the need to facilitate the flow of goods between Great Britain and Northern Ireland. The clause is also entirely in line with the protocol. Indeed, Article 4 states

“Northern Ireland is part of the customs territory of the United Kingdom.”


Article 6 goes on to state

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


In the recitals it states that the application of the protocol

“should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland”.

This clause delivers on the commitments made in the Government’s manifesto, in the Command Paper published by the Government in May on the implementation of the protocol and on the protocol itself. These are not controversial aims, and indeed some were surprised that your Lordships feel differently.

Let me be clear that as there was some confusion about this in Committee, this clause is not dependent on any other in the Bill. There is no infection or so-called contamination here; it is merely about a Government fulfilling their commitment to the people of Northern Ireland. Indeed, the fact that the Government are seeking to ensure that the clause remains in the Bill, while Clauses 44, 45 and 47 are removed, proves the point. This clause does not provide for or allow for a breach in any way of the withdrawal agreement and is entirely in keeping with the protocol.

I turn now to Clause 43. As I have said, and as noble Lords will know, the Government have committed to providing unfettered access for Northern Ireland’s businesses on multiple occasions. Clause 43 gives effect to that commitment by prohibiting the introduction of new checks and controls on Northern Ireland goods, with some very limited exceptions. This is in keeping with what the Government have said constantly and with what was promised in our manifesto. That commitment is critically important to the businesses and people of Northern Ireland. By including Clause 43 in the Bill, we will protect the vast majority of the £8.1 billion-worth of goods sales from Northern Ireland to Great Britain, and guarantee Northern Ireland’s place in the United Kingdom’s internal market. I hope all of us can now agree on the importance of providing unfettered access for Northern Ireland goods to the rest of the United Kingdom. This clause delivers on that.

As with Clause 42, this clause is not dependent on any other in the Bill. I of course recognise that Clause 43(3)(b) refers to Clause 47, but that is only part of spelling out that it in fact allows checks where applicable international obligations require them. That subsection is being removed. This clause does not provide for or allow for a breach in any way of the withdrawal agreement and it is entirely in keeping with the protocol.

Given the broad support there is for unfettered access, the Government’s repeated commitments to legislate for unfettered access—including in the New Decade, New Approach Deal to restore the Executive, our May Command Paper on our approach to implementing the protocol and the manifesto that brought this Government to office in the last election—and given how important it is to protect access for Northern Ireland businesses to their most important market, it would be hugely disappointing for them and for business certainty in Northern Ireland if noble Lords were to remove these subsections unduly.

I turn to Clause 46. Under state aid rules, notification is the process through which EU member states inform the Commission about state aid or potential state aid. This process will continue to apply to the United Kingdom from 1 January 2021, but in relation only to the limited circumstances where Article 10 of the Northern Ireland protocol applies. This clause simply establishes a statutory requirement that no one besides the Secretary of State may notify the European Commission of state aid or potential state aid. It codifies existing practice in legislation and would not be considered novel or controversial to the Commission, as it is unlikely to accept notification from anyone other than authorised persons.

Motion C1 (as an amendment to Motion C)

Moved by

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[Lord True (Con)]

My Lords, I am not a lawyer, as I am frequently reminded in your Lordships’ House, but I am a historian by vocation and occasional practice, and I know that history is the study of cause and effect. I have heard one version of a proto-history just put to us by the noble and learned Lord, Lord Falconer; there are many other versions which no doubt could and will be put—indeed, some have been put in this debate. The thing to do now is to move forward. Once all the documents are revealed, no doubt people will be able to say what had an effect on what. We are here today to make a judgment on carrying draft legislation, a Bill, forward.

I, too, welcome prodigal sons, and indeed prodigal daughters, if I may say so. The noble and learned Lord was kind enough to say that the Government had graciously changed their position. I heard less comment in the debate—although the noble Lord, Lord Dodds, and the noble Baroness, Lady Hoey, referred to it—about the change of mind, if I may use the phrase, by your Lordships. I hope it is forthcoming on Clauses 42, 43 and 46. I welcome that change of mind. I do not believe that unfettered access should have been called into doubt in your Lordships’ House, and I heard no one speak against that principle, although the noble Lord, Lord Newby, appeared at one moment to exult in the idea that it might not exist. I welcome and am grateful for what I hope will be the change of mind on those other clauses, and I hope that the noble and learned Lord, Lord Judge, will be able to confirm that.

I thank all those who have contributed to the debate. I must say to the noble Lord, Lord Adonis, although I do not want to pick him out particularly, that I do not think that, whoever he or she may be, personal vilification of the Prime Minister is a conducive or beneficial way to broaden consensus in debate in your Lordships’ House. I counsel the noble Lord that vilification of the current Prime Minister will not particularly persuade me to listen to his arguments.

As I said in my opening speech—I thank noble Lords for their comments on the facts of it, not the speech —the Government will not be opposing the removal of Clauses 44, 45 and 47. I can confirm to the noble and learned Lord that new Clause 45 is in accordance with the rule of law. However, as I have argued, the remaining clauses in the Bill are vital to the Government delivering on their commitments to the people of Northern Ireland.

I must say to the noble Baroness, Lady Hoey, that I will be repeating a Statement tomorrow, and I will obviously answer questions on that matter. I am sorry, but I do not make the rules and customs of the usual channels in this place, but I understand her feeling, and no doubt she will examine that Statement tomorrow. I do not think I am telling anybody anything that they do not know when I say that, unfortunately, that Statement will be repeated relatively late tomorrow.

The clauses which I hope your Lordships will allow to return seek to protect Northern Ireland’s place in the UK’s customs territory and internal market, and that is something, as the noble Lord, Lord Dodds, recited, that not only this Government and the Northern Ireland Executive but the EU absolutely committed to—unfettered access, so please let us see that back in the Bill.

Whatever the rights and wrongs of the history, I hope that the reality of the day is that people in different parts of this House will be able to have some satisfaction in where we have reached at this point. I always agree that, in life, negotiation is desirable. As I said in my opening remarks, Clauses 42, 43 and 46 have now been sent to us twice by the democratically elected House, and on those I urge your Lordships, if the Question is put, not to vote them out again. I beg to move.

[Lord Judge (CB)]

I do not think there is anything I could usefully add; I think we should get on.