United Kingdom Internal Market Bill

Baroness Andrews Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

[Lord Dunlop (Con) [V]]

My Lords, I support the group of amendments tabled by the noble and learned Lord, Lord Hope. They address a central question: how does this Bill sit alongside the common frameworks process? Common frameworks are the process established to ensure that once the UK has left the EU’s legal orbit, policy and regulatory divergence does not damage the seamless operation of the UK’s domestic market. Unimpeded trade within the UK is something we all agree on.

The common frameworks process was initiated while I was still a Northern Ireland and Scotland Office Minister. The frameworks analysis informing it—the latest iteration of which was published only last month—provides a full assessment of the risk areas arising from EU powers flowing back directly from Brussels to Edinburgh, Cardiff and Belfast. As the noble and learned Lord, Lord Hope, explained, the latest analysis identifies 154 policy areas—115 are deemed to require no further action and 22 require a non-legislative framework, leaving just 18 identified as needing such a legislative framework. Examples in the latest analysis include food standards and labelling, mutual recognition of professional standards, the provision of services, and chemicals and pesticides. As an aside, I am even more confused about the position on pesticides than I was before. When winding up, perhaps the Minister could clarify whether chemicals and pesticides will be a legislative framework. I thought I heard my noble friend Lord Callanan say that it would be a voluntary agreement, from which the devolved Administrations could walk away.

So far as one can tell, this process of common frameworks is making progress—though more slowly than originally intended as a result of Covid. Seven will be in place by the end of the year with a joint commitment from all Governments to deliver the remainder during 2021.

In its detailed report on the Bill, the Constitution Committee concluded:

“The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective internal market.”


When responding to the Second Reading debate, my noble friend Lord True argued that common frameworks are insufficient because they are sector-specific and cannot guarantee the integrity of the entire market. In responding to this debate, I hope that my noble friend will take the opportunity to explain in greater detail the Government’s concerns and the rationale for the approach adopted in the Bill.

There are three specific points that I hope the Minister will address, relating to necessity, urgency and proportionality. First, on necessity, my noble friend Lord True said in his wind-up speech last week:

“The Bill ensures that areas without a common framework will still benefit from the regulatory underpinning and, crucially, market coherence will be provided for issues that fall around, or between, individual sector-focused frameworks.”—[Official Report, 20/10/20; col. 1427.]


I am puzzled by this explanation, as my understanding has always been that the portfolio of legislative and non-legislative frameworks was intended to represent a comprehensive package for managing the identified risks of divergence arising from EU exit. As I have already mentioned, many of the areas identified to be covered by frameworks are cross-cutting, and not simply sectoral, such as public procurement, recognition of professional standards and the provision of services in general. Therefore, can the Minister be more specific in identifying what the issues are that the Government are so concerned about that fall in and around individual sectors, which have not already been identified in the common frameworks analysis?

Secondly, on urgency, I hope the Minister will explain why the Government are legislating in such haste. Yes, this is a major and important piece of economic legislation, but it is also a Bill with significant constitutional implications, not least for the stability of our devolution arrangements and the future of the union. This matters because there are important gaps in the scheme created by this Bill. For example, where in this scheme are the conclusions from the review of intergovernmental relations? When will the review be concluded and published, associated as it is with the work on common frameworks? How will the provisions of the Bill be enforced, and how will disputes between the UK Government and the devolved Administrations be managed?

The timetable for the Bill appears to be predicated on the end of the transition period on 31 December this year, but what is the real risk of regulatory divergence between then and the completion of the common frameworks process in 2021? The House is aware that the European Union (Withdrawal) Act 2018 already confers on Ministers so-called Section 12 powers to freeze devolved competence in relation to EU retained law. It is worth reminding ourselves of its provisions. Ministers can make regulations to restrict the ability of devolved Administrations to change EU retained law for up to two years after our formal exit from the EU. Should they make such regulations, these could remain in force for up to a further five years, so by my reckoning to January 2027. Therefore, on the face of it, there is ample time for the Government to put in place—in co-operation with the devolved Administrations—the necessary protections in the form of common frameworks and the associated intergovernmental architecture to protect the seamless operation of the UK domestic market. In light of the existing legislative protections that are already in place, will the Minister explain the need to legislate on this accelerated timetable, which, as we have heard, has not allowed sufficient time for more than the most cursory consultation? On the subject of consultation, can the Minister confirm whether all the responses to the consultation have been published? If not, will he give a commitment today that they will all be published in full and in short order?

Thirdly, and finally, on proportionality, the Government may be motivated in bringing forward this Bill by Mr Rumsfeld’s famous “unknown unknowns”. Ministers may indeed be confident that a portfolio of common frameworks can do most of the job, but still want to put in place an insurance policy to cater for unforeseen circumstances or to have a mechanism for monitoring the cumulative effects of policy and regulatory differences, which on their own may be entirely harmless. That is fair enough, but if that is so, then is not the scheme in this Bill the wrong way around? Instead of effectively overriding from the outset the practical ability of devolved Administrations to regulate differently to reflect local priorities and to suit local circumstances—and in the process potentially compromising a core benefit of devolution—would it not have been preferable for the Bill to provide a safety net of last resort? Would that not provide a better balancing of the needs of free trade within the UK with the need to respect the roles and responsibilities of the devolved institutions? Would not this create better incentives for all parties to agree sooner rather than later the full package of common frameworks? We all agree with the aims of this Bill. However, I suspect the Government will need to do more to convince the House that the legislative scheme in the Bill is the best way to achieve those aims.

[Baroness Andrews (Lab) [V]]

My Lords, it is a great pleasure to follow the noble Lord, Lord Dunlop, and indeed to agree with much of what he said. I support the amendments in the name of my noble and learned friend Lord Hope.

I should declare an interest as the chair of the Common Frameworks Scrutiny Committee. The House will judge that I have a formidable group of Peers to do the work, and we have heard from some of them this evening. It has been splendid to hear so much exposure given to common frameworks because, as many other noble Lords have said, the Bill is silent on them.

It is a particular pleasure for me personally to support these amendments because they are a model of clarity and common sense. They track the history and purpose of, and the co-operation involved in, the common frameworks in the context of our membership of and exit from Europe, holding firm to the principle and practice of devolution.

The Government are silent on the common frameworks and silent on the years of hard negotiation that has gone into them so far to ensure that the principles that govern them bear fruit. I am surprised at that silence because in everything that the Ministers have said so far—and they have said it informally in communications with us, which we very much welcome—they have insisted that they still support the principles of the common frameworks and their role in stabilising the internal market, yet in effect these clauses drive a stake through them.

As my noble and learned friend Lord Hope said, the common frameworks allow for reconciliation across an enormous range of highly sensitive areas of policy—from the safety of baby milk to protections relating to the location and storage of hazardous waste, to maintaining future emissions trading. It has been a slow and careful process because the dispute mechanisms and the legislative frameworks have to be resilient if the internal market is to work with integrity in the future.

As the noble Lord, Lord Dunlop, said, at Second Reading the Minister defended these clauses in the Bill on the grounds that this matter needs regulatory underpinning, because there are issues that fall around and in between the frameworks. First, as he also said, they are not entirely sector based, but the real puzzle for all of us is where these identifiable gaps are. If there are indeed gaps, could not other frameworks be developed as appropriate? We already have the models in front of us. Therefore, like the noble Lord, Lord Dunlop, I would be very interested if the Minister could now tell us in more detail what these issues are that fall around or between the individual sectors. What is the problem to be solved here?

The best clue that we have is that the Minister has suggested that the Bill is needed in case there are future developments that cut across seamless trade. Again, it is impossible to know what the Government think is likely to happen, why they cannot share that with us and why such developments cannot be accommodated. So far, no Minister and no officials, in formal and informal conversations, has come up with an instance of what this means.

It is the more frustrating because, by definition, the frameworks are dynamic. They will be under regular review—they are work in progress. If there is a push for further divergence, the reconciliation and dispute processes kick in. The union becomes the stronger because it acknowledges that culture, demography, local economics and geography drive diversity. If the Government fear that somehow, and at some point, unacceptable barriers to trade will be erected across the union, surely the frameworks are the solution and not the problem.

The Bill is important. It is also important not to exaggerate, but I believe that these clauses will exact an enormous price if they are not amended, as my noble and learned friend Lord Hope suggests. The mutual recognition principle becomes the default position, no matter what the devolved nations hope to achieve. The Government argue that, for example, we have the highest environmental standards in the world. Indeed, we might, but how can these be upheld in a highly competitive market where cheaper food invites cutting standards? How can each nation continue to drive down salt content in food if a cheaper product with a higher salt content becomes available for sale across the UK?

--- Later in debate ---

[Lord German (LD)]

My Lords, these amendments have been prepared by the Welsh Government and have their support; I am pleased to support them. The Welsh Government, as noble Lords know, are committed to the union of the United Kingdom. These proposals before us today seek to find a route through in the way that the Bill has been put together. In fact, they intend to put the horse before the cart rather than the cart before the horse. In the discussions that we had on the previous group and subsequently, there have been for me some very puzzling matters, and I am trying to work out quite where the Government have placed themselves.

First, on timing, the Government seem to argue that we must have the Bill in place in its entirety so that on 1 January they can move forward and have something absolutely concrete to work from. I will come back to that point in a moment. The second point is that the Government have not been able to find any way to describe something which falls outside the area of the structure.



In the last round of amendments, the Minister described additives for flour. Flour and additives are part of the common framework on nutrition. I am told that the three frameworks which are already on the way to early delivery and will be fully operational by the end of the year cover nutrition, hazardous substances and emissions.

I am puzzled why the Government are not able to provide any specific examples of what falls outside the framework, apart from “the future”. We do not know what the future is, but as it arrives we will sort out legislation and frameworks as we move along. That is bound to happen.

Timing is another puzzle because the Government do not want to proceed with the common frameworks as the underpinning structure for this Bill. They seem to want to use what the noble Baroness, Lady Finlay, called a blunderbuss. Battle axe might be another way of putting it. Basically, they do not want the co-operative approach which has been at the forefront of these frameworks.

In September, the Government published their view of the frameworks. Right at the front—on the first page—were the principles which the Government are now seeking to break about the way in which they intend to govern, and about giving and not taking away powers from the devolved Administrations. They were right at the top of the Government’s own papers as recently as last month. If the Government want to put them front and centre, but need something temporary, why not say so? Why not put in a sunset clause, or some form of clause which says this will be a temporary measure until particular frameworks are in place?

The Government’s position is not defensible inside Wales as I know it. The Welsh Government have sought to bring forward a proposal which meets the Government’s aspirations. It says, “Put the common frameworks first and then, if there is any dispute whatever, use the backstop which is being put into this Bill through regulations.” We all want to see an alteration to the way in which they have been carried out and for there to be adequate consultation and debate.

My concern is that I am not certain that the Government know where they are going. I am not certain that they know what they mean by “putting the common frameworks front and centre”. Is this a timing issue? I hope that the Government will be able to answer all these questions.

I want to talk briefly about the one-use plastic teaspoon. They will be banned next year by the Welsh Government, through the Welsh Assembly, because they are bad for the environment and do not degrade in the soil. One-use cutlery is damaging for us as a country and for our environment. However, if that legislation is passed, there is nothing to stop a whole generation of English single-use plastic spoon manufacturers bringing them across the border and distributing and selling them wholesale in Wales. This is an extreme example, but it illustrates that there are bound to be some divergences if the power exists. If, as a Government, you have been given powers and you want to enable them, but you find you are being stopped because of this sort of extraordinary behaviour by a Government somewhere else, that is not going to help the union. The union of this United Kingdom is to be treasured, but to treasure it you have to respect it. I do not believe that the Government are doing so in this Bill. So I ask them all those questions about the direction in which they are going. Will they try to outline whether these frameworks will be placed front and centre? Is it a timing issue? Can they come up with some examples—one would do—which would tell us where the gaps are?

[Baroness Andrews (Lab) [V]]

My Lords, I can speak more briefly to this amendment than the one I spoke to earlier, because my arguments will be much the same. What attracts me particularly about this amendment is that it once again asks the Government to look at the possibility of putting in the Bill the process whereby the Bill becomes the default position and the common frameworks process has to be exhausted before the market principles kick in. I have said before that I think that this is logical. It helps the Government to achieve their own objectives.

When the Minister replied to the previous debate, it was very welcome to hear him say that he was prepared to give more thought to things he had heard the House say this evening. He seemed to think that this process of exhaustion was somehow going to be rather difficult and messy to achieve. From what we have seen in the Common Frameworks Scrutiny Committee, the dispute resolutions are worked out very clearly and in detail. I do not see a problem with that process at all and I would be happy to talk to the Minister about it. If he is worried about that, we can provide some reassurance and, as we scrutinise it, there may be some things we can do to improve the process. If it is a technical problem, then that is what we are here to solve. If it is a problem in principle, then we need to know; he needs to tell us.

The rest of the amendment is slightly more legislative in structure than the amendments from the noble and learned Lord, Lord Hope of Craighead, but I continue to support it in principle because it flags up the significance of common frameworks and the importance of the need for a fit between the Bill and the common frameworks.

The noble Baroness, Lady Finlay, asked me whether we had come across any areas where there was deadlock or difficulty in securing agreement. In the summaries of the frameworks that we have seen so far, and in the one completed framework, we have not seen anything that would alert us to the fact that there is a continuing problem. The problem that the framework negotiators have is the unsettled nature of European negotiations and the issues posed by this Bill itself. They are bound to be waiting for resolutions of different sorts. The processes that they are establishing are clear, transparent and robust. As I say, they offer a solution in practical terms, as well as, frankly, in ethical and political terms, as far as the Government are concerned.

With that, I simply say that I am pleased to support the amendment in principle. I look forward to the Minister, the noble Lord, Lord Callanan, having another go at some of these very specific questions that I think we have a right to hear some answers to.

[Baroness Neville-Rolfe (Con) [V]]

My Lords, I will speak to Amendment 6. I have already expressed some concerns about delays and problems that could arise in trying to satisfy devolutionary feelings beyond the existing devolution settlements and the withdrawal Act, which have already given many powers to Scotland, Wales and Northern Ireland.

We need always to bear in mind the need for a well-functioning single UK market. That is in the interests of citizens, and of charities and businesses which operate across the borders of Northern Ireland, Scotland, Wales and England. My noble friend Lady Noakes cited some figures which bear repeating. I think she said that 60% of Welsh and Scottish exports and 49% of Northern Ireland exports come to other parts of the UK. Incidentally, I was glad to hear my noble friend the Minister committing the Government to high regulatory standards.

We heard from the noble and learned Lord, Lord Hope, in an impressive speech, and from the Minister in an equally persuasive one, about the role of common frameworks in relation to Amendment 5. I heard what my noble friend the Minister said, but it may be that a brief reference to these common frameworks could make everyone more comfortable with this Bill—I was thinking of an annual report on how they are working and how consultations have progressed. It seems odd, given their importance, that there is no reference to them at all.