United Kingdom Internal Market Bill

Baroness Humphreys Excerpts

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

[Baroness Humphreys (LD) [V]]

My Lords, it has been a great privilege to listen to the speeches of noble Lords today, especially those who have voiced the concerns of so many of us about this Bill and the impact its invitation to collude in the breaching of international law has already had on the UK’s standing on the international stage.

Politicians in Wales are equally deeply concerned by the contents of this Bill and the implications it has for Welsh devolution, and none more so than David Melding, the highly respected and long-serving Conservative Senedd Member, who resigned his position as shadow Counsel General last month. He cited the need to be able to speak out against what he considers to be,

“a lack of statecraft at this crucial time for the UK’s very survival as a multi-national state.”

Those three words, “lack of statecraft”, are the most telling; a stinging criticism from one of the Senedd’s most loyal Conservatives, and three words that sum up what is so wrong with this Bill. Statecraft involves diplomacy, co-operation, consultation and consensus, but these are words no longer associated with the delivery of the UK’s internal market, and despite the Minister’s conciliatory words and tone when introducing this debate, the words on the face of this Bill tell another story.

It is clear that the UK Government’s response to dealing with devolved governance issues that arise will be to resort to government by diktat. For example, the principles of mutual recognition and non-discrimination are, according to this Bill, to be applied to all goods and most services, with a highly limited list of exceptions which can be changed by UK Ministers through secondary legislation without consultation with the devolved Administrations. In Wales, this is seen as a fundamental assault on devolution, preventing the Senedd carrying out its duty of protecting the citizens of Wales from substandard goods and services.

The proposal that UK Ministers should take new funding powers to enable them to fund hospitals and schools in Wales without consultation with the Welsh Ministers who have the devolved responsibility for these areas is provocative, as is the threat to build the M4 relief road against the decision of the Welsh Government, a decision endorsed by the Senedd on cost and environmental grounds. This attempt to chip away at the powers of the Senedd is an example of Westminster colonialism at its worst. I understand the Government’s dislike of the EU flags seen on Objective 1 projects in west Wales and the valleys, and their need to see the union flag on new projects, but far better to make an investment in areas which are not devolved and for which the UK Government have actually been responsible for years and neglected.

As many noble Lords have already said, the irony is that this Bill is mostly unnecessary. Continued work on common frameworks with the devolved Administrations would ameliorate its impact. The work already carried out by the devolved Administrations, your Lordships’ committee and the UK Government until now has been an example of statecraft at its best. Most worryingly, the imposition of decision-making by Whitehall in areas of devolved responsibility will do nothing to aid the UK’s survival as a multinational state.

United Kingdom Internal Market Bill

Baroness Humphreys Excerpts

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

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it is always somewhat intimidating to follow an introduction such as the one we have just heard from the noble and learned Lord, Lord Hope. I think I heard him correctly when he said at one point that he did not have a monopoly of wisdom. That was the only bit of his speech that I really disagreed with.

As we heard from the noble and learned Lord and from the noble Baroness, Lady Finlay, we need a mechanism to ensure that the common frameworks are at the start of the process before market access principles are applied. How exactly that can be finessed between the menu of options we have in front of us, with these and other amendments today, can be a question for discussion—as indeed the noble and learned Lord, Lord Hope, indicated. But, essentially, the role of the common frameworks undoubtedly needs a statutory basis. The consensual mode of working that we have seen via the common frameworks surely has to take priority over other modes of rule setting, and a failure-to-agree process—which must be exhausted before other action is taken—needs to be in the Bill, as it is in the common frameworks mechanism.

Like other Members of your Lordships’ House, I was involved in the work of the European Parliament. I was a party functionary rather than an elected Member. Through that I witnessed the discussions, arguments, concessions, joint working, co-determination, consultation, redrafting and mutual respect that went into the emergence of EU regulations. There was no simple imposition by one all-powerful body. Negotiation and agreement were needed between the European Council, the Commission and the European Parliament for action to be taken. As the noble Lord, Lord Inglewood, mentioned, some really big decisions were referred to the IGC—the Intergovernmental Conference. It was a way of working that produced outcomes to which everyone could sign up. Now, consensus building might have taken time; there was the odd time when clocks were stopped at midnight, which we may have to do again today, but the position reached each time meant that all the parties involved could live with the resulting decision.

My view—and I think the view of all of us—is that the internal market process ought to be replicating, albeit on a smaller and much easier scale, those sorts of international and intranational methods that allow for joint working and consensus building as the prime route for decision-making. Of course, some issues will prove not to be amenable to consensus—this too was mentioned earlier—in which case there has to be an agreed adjudication and decision-making mechanism in place, but with the common frameworks procedures exhausted before any of that has to be set in train.

I turn to Clause 51, which has just been mentioned by the noble Baroness, Lady Finlay. This is understandably of major concern to the devolved legislatures and their Governments. In three quite simple, short subsections it amends the Scotland Act 1988, the Government of Wales Act 2006 and the Northern Ireland Act 1998—and all without a word of warning, far less the agreement of any of those elected authorities whose established settlements it undermines. Few of us expected to read a clause like that, dropped into a Bill on a quite different subject, which would blatantly amend these long-developed settlements.

We heard from the noble Lord, Lord Dunlop, in the previous group and we will hear from him shortly in this group. I hope he will not mind if I quote from what he said at Second Reading. He said:

“Devolution is now integral to the UK’s constitutional arrangements. At a time … when it has never been more important for central and devolved Governments to work together … to risk destabilising those arrangements seems careless, to say the least.”


He went on to ask whether

“we want our country’s future to be all about endless intergovernmental competition and conflict or about co-operation and confidence”.

His preference, of course, was for

“a modern, thriving, forward-thinking and inclusive UK union … to look and feel like a joint endeavour”.—[Official Report, 19/10/20; col. 1336.]

That is what this group of amendments is seeking to achieve, but it is not where the Government are going at present. They seem to be thinking of asking us to pass this Bill without legislative consent from the very authorities whose powers are being diminished. I cannot believe that the Minister wants such an outcome, but how seriously does he take this? Is he really happy to completely override the Sewel convention, set aside the success of the common frameworks process and challenge the devolution settlements that have served us so well for so long?

[Baroness Humphreys (LD) [V]]

My Lords, I will speak to the amendment to Clause 51 in the name of the noble Baroness, Lady Finlay of Llandaff, to which I have added my name. The amendment opposes this clause standing part of the Bill. In a Bill that stands accused of breaching international law and impacting on devolution settlements, this clause is probably one of the most harmful, in the power that it hands to Ministers, and through them the Executive, to make regulations.

As the Explanatory Memorandum explains, regulations made by Ministers under these powers are to be made by statutory instrument and may be used to amend, repeal or modify the effect of legislation, including Acts of Parliament, which of course include the Government of Wales Act 2006—and, as the noble Baroness, Lady Hayter, has just pointed out, all without consultation with the devolved Administrations.

However, the prime function of this clause, and the whole of Part 7, is to ensure that all clauses of this Bill become protected enactments. It neuters the powers of the devolved legislatures, ensuring that they are unable to put forward Acts in their own Parliaments, in their own areas of devolved competence, to modify this Bill if or when it becomes an Act. This is almost unprecedented. The noble Baroness, Lady Finlay, has already told us that, since devolution, the only other examples of protected enactments covering all sections of an Act are the Human Rights Act and the Civil Contingencies Act.

Even in the case of the withdrawal agreement Bill, which was initially intended as a protected enactment, the UK Government produced a clause-by-clause analysis justifying protected enactment status, which eventually resulted in only a few clauses being protected. Why is this approach not applicable to this Bill? The Welsh Government have asked for a clause-by-clause discussion of why each clause should be protected. I would be grateful if the Minister could outline the Government’s response to this request.

Up to now, the Government have not produced any detailed justification of why protected enactment status is necessary, which exemplifies their cavalier attitude to devolution in general. In Wales this is seen as an assault on our devolution settlement, heralding the return of direct rule from England.

We are faced here with another example, as with the Covid-19 response in England, of Whitehall insisting on managing from the centre rather than understanding and empowering local decision-making. The powers of our devolved legislatures and regional mayors, although limited, seem to be resented and distrusted by the Government, and the automatic response seems to be to claw back control to the centre. My fear is that this Government’s unthinking, knee-jerk reactions all add to the perception that the union is not working for the devolved nations and, as I have said in previous contributions, this is encouraging an increasing percentage of people in Wales to conclude that the future lies in independence.

My colleagues and I on these Liberal Democrat Benches want to see true devolution of power to all four nations, including England, in a federal UK where each nation is equal to the other and treated with equal respect. For our party, the union is important because, as federalists we know, that without a union, federalism cannot exist, but we also know, that without federalism, this union will not exist into the future.

Clause 51 is truly indicative of the UK Government’s attitude towards the devolved parliaments and their powers and the desperate need they seem to have to curtail those powers by a show of strength. It is vital to the devolved nations that this clause does not stand part of this Bill, and if the noble Baroness is minded to reintroduce a similar amendment on Report, she will again have my support.

[Lord Mackay of Clashfern (Con) [V]]

My Lords, I am a very strong supporter of the common framework system, explained so well by my noble and learned friend Lord Hope. One of the defects I find in this successful system, which I think was a very good invention at the conclusion of the withdrawal agreement Bill when it was set up, is that it is without formal parliamentary recognition. I do not know with any degree of completeness what sort of results it already has, except in the reports produced in accordance with the statutory requirement. One does not know the exact detail of the decisions made. I hoped that as the principles went along in the common frameworks procedure, the principles to be set up in the Bill for the internal market in the UK would become evident. However, so far, that has not been fully revealed in Parliament. I am very anxious that some form of recognition in Parliament of decisions taken and agreed should be set up. This is the purpose of the new clause that I propose in Amendment 170. I do not stand closely on the wording, but some recognition of what is happening in Parliament and ensuring that it is regarded as part of the law would be a useful addition to the present procedure.

The situation between the devolved Administrations and an internal market was regulated by the European Union, therefore some form of renewal of that may be required. I notice that the Scottish Government have said they would not introduce any changes that would damage the internal market, pending legislation. Of course, that is only on the basis that legislation would be something to which they were able to agree. I am very anxious that the results of what we do now should not damage the arrangements for devolution in a way that would point towards independence.

United Kingdom Internal Market Bill

Baroness Humphreys Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

The noble Lord, Lord Liddle, has withdrawn so I call the noble Baroness, Lady Humphreys.

[Baroness Humphreys (LD) [V]]

My Lords, I thank the noble and learned Lord, Lord Mackey of Clashfern, for tabling the amendments in this group.

In what is becoming an extremely welcome defence of the devolved Administrations and their devolution settlements in debates on this Bill, these amendments point the way to involving a forum that already exists when discussing and agreeing to regulations under the Bill: the Joint Ministerial Committee on EU Negotiations. The amendments would require the Competition and Markets Authority to consult the JMC on EU negotiations; they would also ensure that regulations are brought before the committee and discussed by it before being laid before Parliament.

The amendments are entirely sensible. The JMC on EU Negotiations appears to be the ideal vehicle for such oversight and deliberations. The amendments also open up the opportunity to discuss the way in which the JMC operates, to examine whether it is fit for purpose and to envisage its future role. Of course, the Joint Ministerial Committee on European Negotiations is a sub-committee of the Joint Ministerial Committee—a committee made up of Ministers from all four national Governments. On looking at the memorandum of understanding that underpins the JMC’s operations, it seems an ideal candidate for this oversight role. It is worth examining its wording. According to the memorandum, the JMC should provide

“central co-ordination of the overall relationship”

between the UK and the devolved nations and, among other things,

“consider devolved matters if it is beneficial to discuss their respective treatment in the different parts of the United Kingdom”

and

“consider disputes between the administrations.”

It seems an ideal candidate indeed, as I am sure we all would agree. This is exactly the sort of forum that we need, not just to have oversight of regulations brought forward by the CMA but to consider all issues arising from the relationship between the four nations. But the reality is slightly different. The JMC has the potential to be a forum to guide devolution issues and resolve them, but the committee itself seems to operate on an almost ad hoc basis.

My noble friend has already pointed out the difficulties with the Joint Ministerial Committee (Plenary), which is supposed to meet at least once every year. Like him, I look forward to hearing when the Prime Minister will be willing to chair another of its meetings. The Joint Ministerial Committee on EU Negotiations, to which these amendments refer, was initially expected to meet monthly. It did so until February 2017 but then ceased to operate for eight months, and its meetings have been held on an irregular basis since then. It met five times in 2019 and, I believe, has met three times so far in 2020. I would be delighted if the Minister could prove me wrong and tell me that it has met more often.

Despite the obvious drawbacks in the way that the JMC and its sub-committees operate, I am extremely grateful to the noble and learned Lord for tabling these amendments, because they point a way forward. The JMC and its sub-committees, actual and potential, could have a vital role to play in resolving issues that arise in and around the operation of the UK internal market, but first we need to resolve the long-standing issues surrounding its constitution. The frequency of meetings and the question of who controls the agenda, for example, all have to be placed on a statutory footing. The JMC and its sub-committees, operating efficiently, regularly and fairly, have the potential to allay the fears of the devolved Administrations and allow for the consensual and co-operative government they seek. I support these amendments.

[Lord Naseby (Con)]

My Lords, when I read the Bill and the amendments to it that have been tabled, I asked myself, “Why?” Of course, my noble and learned friend Lord Mackay is a very experienced attorney and parliamentarian, but the whole purpose of the CMA is to be independent of government. It is not there to be dictated to because one of the devolved Administrations does not like the look of what the task group is going to be doing. That would be absolutely wrong. The whole basis of the CMA and OIM is that they are independent of government. They publish their results, monitor properly and advise, but the amendment would seem to put in another tier of management, like Europe in reverse. That is very wrong, and it would find no favour with me at all.

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

My Lords, I speak in support of Amendment 166, in the name of the noble Baroness, Lady Boycott. It is an honour to follow her, along with the noble Baroness, Lady Jones, and my noble friend Lord Whitty. I also support Amendment 167, in the name of my noble friend Lord Stevenson of Balmacara, and its inclusion of the impact of climate change—particularly flooding. That is an issue close to my heart, living as I do near Cockermouth in Cumbria, which has suffered such devastating flooding over the past 10 years.

As we heard today, and in last week’s debate, Part 6 does not rule out working through the devolved Administrations, but—and this needs repeating—sets no requirements to do so, and enables Ministers to spend money directly in otherwise devolved policy areas.

Right across the world it has been recognised that we have to combat global warming and restore biodiversity. It has been agreed that the next round of European structural funds will have tackling climate change and addressing the just transition as a major theme. In May of last year, Parliament recognised, on the Floor of the other place, that we are in a climate and environment emergency. Last week, in his response to Amendment 52, the Minister said that

“the protection of the environment and tackling climate change are vitally important, and something that the Government are, of course, already committed to.”—[Official Report, 28/10/20; col. 339.]

If the Government are serious about achieving this aim, they need to ensure that where direct financial assistance is given it is consistent with these climate and environmental goals. We need to commit to environmentally sustainable, transparent legislation and policies, and apply them to any future trade deals and relationships, if we are to have any hope of tackling climate change. Whatever the formal future relationship between the UK, its constituent nations and the EU, it is vital that we maintain close environmental co-operation and do not risk undermining it through poorly thought-out legislation. As the noble Baroness, Lady Boycott, explained, Amendment 166 could avoid funding being provided for projects that are not compatible with climate and environmental targets and could undermine these goals.

Funding to support the environment needs to be secure as we leave the EU, because we will lose access to so much. I will give a couple of examples that have not yet been mentioned. The EU LIFE programme for environment and climate action has €3.4 billion to support, among other policies, the special conservation areas in the Natura network. The EU maritime and fisheries fund is a €6.4 billion programme, more than a quarter of which supports projects protecting marine environments, developing sustainable fisheries, and supporting the scientific and data-collection aspects of fisheries management. The concept of sustainability involves operating in a way that takes full account of an organisation’s impacts on the planet, its people and its future. That includes how Government operate and the decisions they take. Amendment 166 will help us to secure this for the future.

[Baroness Humphreys (LD) [V]]

My Lords, I oppose the Question that Clause 48 stand part of the Bill. I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for introducing this part of the debate so clearly. We have heard assurance after assurance from Ministers that the Bill does nothing to take powers away from the devolved Parliaments, but the inclusion of Clause 48 certainly belies their assertions.

This clause, were it to stand, would mean that powers would be returned from the EU to the UK Government to spend on areas such as economic development, infrastructure, sport and education, and will therefore give Whitehall the powers to fund projects to replace EU funding programmes in areas that are devolved to the Welsh Government. But these powers are wider than those in the EU funding programme. The EU structural funds have never funded health, housing or education, and the inclusion of this clause on financial assistance has given cause for concern. It gives rise to a number of questions, to which I hope the Minister will respond.

Our building regulations, and fire and energy safety standards are different in Wales. If the UK Government choose to fund our housing associations to build more social housing, which regulations and standards would apply? As the noble Baroness, Lady Finlay, has said, there are no academies or free schools in Wales; the Welsh Government have rejected their implementation. Clause 48 would allow the UK Government to fund education projects in Wales. Does this mean that the UK Government would march in, with no consultation, and build these schools in Wales?

The intention of the UK Government to implement the M4 relief road scheme is provocative, to say the least. It is an issue the Senedd has examined and debated in detail. It made the decision to reject the scheme on the grounds of cost and impact on the environment, and to develop plans for another route. It is an arrogance that the UK Government feel they can overthrow its decision.

The UK Government fail to understand that they have no mandate to operate in these areas in Wales. In this House, we are expected to honour the manifesto commitments made by the Government in a general election and not to vote against them. In Wales, at the last Assembly elections, the people of Wales gave the Welsh Government a mandate based on their manifesto commitments. What right do the UK Government have to act against the expressed wishes of the people of Wales? For years, we have been clamouring in Wales for the UK Government to invest in projects that they have responsibility for—in our railways and the development of tidal energy, for example. I suggest that that would be a good starting point.

Wales has been eligible for £375 million a year from EU funds for almost 20 years. The management of these schemes has always been shared between the EU and the Welsh Government. The guidelines and parameters have always been clear, and the principles of co-operation and consensus have always been evident.

Now that EU funding is coming to an end, we need clarity on its replacement. The time has come for this Minister to give this House details of the proposed replacement through the shared prosperity fund. Up until now, the UK Government have failed to explain how that fund would operate and what role the devolved Governments would have in spending decisions made under it. Will the Minister do that today?

Many speakers, from all four nations of the UK, have spoken against this Bill’s attempts to undermine our devolution settlements. At Second Reading and in debates on this and other amendments, we have heard the same calls. I hope that the Minister and, through her, the Government, are beginning to understand that, after 20 years, the devolution genie cannot be put back in the bottle. I know that to this Prime Minister and his Government a bullish determination to win at all costs is important, but we have to find ways of working with and not against each other and to find solutions to our problems together. Clause 48 is a perfect example of the Government attempting to grab the devolution genie and force it, feet first, back into the bottle. Sadly, such an attitude does nothing but provide further ammunition to those who would favour the break-up of the United Kingdom.

United Kingdom Internal Market Bill

Baroness Humphreys Excerpts

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

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, I also welcome the Government’s amendments in this group and the speech of the Minister. If I may, I will try to answer the concern just expressed by the noble Baroness, Lady McIntosh of Pickering. I think it is fair to say that some of us fear that the Government might be tempted to try to overturn the amendments of the noble Baroness, Lady Andrews, in the other place, and so we would like the House to fully consider all the amendments in this group that have been tabled by the noble Baroness, Lady Hayter, and myself.

I would like to speak in favour of Amendments 15, 20, 27, 34 and 46. All of these amendments are based on the same principle: that, when issuing guidance as to the implementation of market access principles, or when seeking to extend or further limit the exceptions to the application of the market access principles, the Government must obtain the consent of the devolved Governments to doing so.

However, we are sensitive to the nervousness of the Government and wish to be helpful by providing clear reassurance in statute of coupling a consent requirement with a limited-time proviso. This states that, should consent not be forthcoming from one or more devolved Governments within a month, the Government may proceed to make the changes or issue the guidance, subject only to the need to make a statement to Parliament as to why this is necessary.

This is not an onerous requirement, and I know that what we have proposed is less than the unqualified requirement for consent that the devolved Governments in both Wales and Scotland would have preferred. But this amendment is a healthy, open compromise which can comprehensively allay the fears of the Government Front Bench as to the risk of the process somehow grinding to a halt should a Scottish or Welsh Minister try to delay. Indeed, our approach, advocated in the slightly different context of appointments to the office for the internal market by the Welsh Government, has been adopted by the Minister in government Amendments 56 and 57, so it seems difficult to see how the Government could object to this.

I therefore hope that the Minister will think again and accept these helpful amendments, rather than put us in a situation where we need to go to a vote.

[Baroness Humphreys (LD) [V]]

My Lords, I rise to speak to Amendments 26, 27 and 28 in this group, and in so doing I would like to thank noble Lords who tabled the amendments in this group and introduced them so clearly today.

Clause 12 of the Bill provides the Secretary of State with a power to issue statutory guidance about the practical operation and effect of the market access principles for goods. These amendments to the clause highlight what is, of course, a recurring theme in this Bill: the assumption that such decisions will be made by the UK Government, in the guise of the Secretary of State, without any input from the devolved Administrations, dismissing any attempt at building on intergovernmental relationships to come to consensus. It is this assumption and its consequences that I wish to address quite quickly today.

In a recent article published by the Centre on Constitutional Change, Greg Davies of Cardiff University argues that this Bill—and, I would contend, particularly clauses such as Clause 12 and others in this group—represents a failure of soft law and amounts to the introduction of

“a new constitutional settlement by stealth.”

Since the creation of the National Assembly in 1999, our two Governments have used soft-law techniques of intergovernmental political agreements and memoranda of understanding to form and guide the relationship between them. Because soft law relies on mutual trust, good will and co-operation rather than legal enforcement, it can, this article argues,

“be exploited to sidestep more fundamental reform”.

The introduction of this internal market Bill has, I believe, opened the Welsh Government’s eyes to the reality of the weakness of a system that relies on soft law; they themselves have described the Bill as a “new low”. So, in a Bill which will curtail the ability of devolved Governments to regulate products and services within their territories that originate from elsewhere in the UK, Clause 12, and the additional powers it gives the Secretary of State to act in areas of devolved competence, adds insult to injury.

The Welsh Government have no official voice in this Chamber, but they have the voice of many Members who value the devolution settlements and are determined to see the devolved Parliaments flourish and grow. So I am extremely grateful to the noble Lords who have given us the opportunity to debate these three important amendments today, together with other amendments in this group. In these amendments, this House is being asked to reaffirm Parliament’s support for the devolved settlements, to confirm its continued confidence in the soft-law process of building intergovernmental relationships, and to reject the attempts to introduce—and reject being complicit in—what is, in effect, a new constitutional settlement by stealth.

Of course, I welcome Amendments 26 and 28 in the name of the noble Baroness, Lady McIntosh, which call for consultation with Ministers in the devolved Governments when issuing guidance relating to Part 1 of the Bill, and Amendment 27, in the name of the noble Baroness, Lady Hayter of Kentish Town, which calls for the Secretary of State to obtain the consent of Ministers in the devolved Governments to such guidance. My preference is, of course, for Amendment 27, as it places this Parliament’s commitment to the soft-law process on the face of the Bill and provides for a meaningful outcome to consultation.

I also support Amendments 15, 20, 34 and 46 in this group, which also call for the consent of the devolved Parliaments. In addition, I do welcome the Government’s conversion to consultation in their amendments, but I regret that they really do not go far enough. If the noble Baroness is minded to put any of her amendments, particularly Amendment 15, to the vote, I and my colleagues on these Benches will support it.

United Kingdom Internal Market Bill

Baroness Humphreys Excerpts

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

[Baroness McIntosh of Pickering (Con)]

My Lords, I preface my remarks by saying that what will replace the European structural funds is a matter of interest not only to the devolved Administrations but to the regions, such as Yorkshire, as well. I was fairly agnostic about this group of amendments before the debate commenced but now I think that the noble and learned Lord, Lord Thomas of Cwmgiedd, and the other noble Lords who tabled these amendments have done the House a great service.

In the briefing on the spending review, the emphasis now appears to be much more on UK-wide spending. It states:

“The Spending Review takes advantages of our departure from the EU to benefit the union. We will ramp up funding, so that total domestic UK-wide funding will at least match EU receipts … for the introduction of the UK Shared Prosperity Fund, we will provide additional UK funding to support our communities to pilot programmes and new approaches. We will also deliver £1.1 billion to support farmers in Scotland, Wales and Northern Ireland, £20 million to support fisheries—and we will build one freeport in each part of the UK.”


It goes on to say that the spending review is UK-wide and refers to the UK shared prosperity fund and the shared rural network. Although I welcome the funding that has been announced, it is incumbent on us today to find out whether, in the words of the noble Baroness, Lady Finlay, the Government are now working around the devolved Administrations rather than with them.

I am particularly concerned with one aspect relating to economic development, which I hope is relevant to this group of amendments. England and Defra have clearly stated that they are committed to phasing out direct payments to farmers from 2021, but the new system involving an environmental land management scheme will not be in place until 2024. As I understand it, however, the Scottish Minister has announced that direct payments to farmers will be retained for the foreseeable future. That begs the question of what the impact on economic development will be for English farmers as opposed to Scottish farmers and whether that will potentially distort the market between England and Scotland. That would seem to flout the principles of mutual recognition and non-discrimination, which we have heard so much about during the Bill’s passage.

I welcome this debate. I am particularly supportive of Amendments 64 and 67, both of which have been spoken to so eloquently by their authors. I urge my noble friend the Minister to say how the payments under the shared prosperity fund will be distributed. Obviously, I would add a rider that Yorkshire would like to have its fair share of that fund, but it is incumbent on my noble friend to state whether we are departing from what we have become accustomed to under devolution or whether this is simply a red herring.

[Baroness Humphreys (LD) [V]]

My Lords, I support Amendment 64, which seeks to remove Clause 42 from the Bill. I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling such an important amendment and for his excellent explanation and analysis of its intent.

Clause 42 empowers the UK Government to provide financial assistance for economic development in any area of the UK. At the outset, I want to make it clear that I have absolutely no objection to the UK Government making investments for economic development in Wales—nor, I believe, would anyone else in Wales. It is the intrusion into devolved powers that is so offensive. Those of us who live in the Objective 1 area of West Wales and the Valleys understand that our economy is weaker than those in other areas of the UK and that we live in one of the poorer regions of Europe. We have appreciated the EU’s investment in the past 20 years; for example, the investment in the A55, which provides such a vital transport link across north Wales, and the projects that we have seen come to fruition under the rural development fund.

In my contributions on Second Reading and in Committee, I said that investment in our region is desperately needed—it was before we received Objective 1 funding and it will be when it ends—but this clause gives the Government extraordinary powers to act in areas of devolved competence and in areas where the EU structural funds have never operated. It is extremely disappointing that, throughout this clause, there is no mention of consultation, joint planning of schemes, joint programmes of work or joint management of projects—all examples of the collaborative approach to investment programmes initiated by the EU that we have become used to. There appears to be no clear setting of objectives, other than, I suspect, that the Government’s prime objective is to see projects in the UK—in the Prime Minister’s words—emblazoned with the union flag. I have no problem with that either. In West Wales and the Valleys we are used to seeing EU blue flags or plaques on projects. They are an indication that the needs of our area have been recognised, and so it would be with the union flag.

There is, however, still no clarity on how needs will be determined and recognised in the UK under the shared prosperity fund, whether projects will be imposed or applications sought and, crucially for us in Wales, what impact there would be on our financial settlement. We still do not know whether a UK Government investment in a road-building programme, for example, would lead to a reduction in the Barnett allocation, or whether projects imposed on us would be financed by loans that require repayment by the Welsh Government. All this curtails the Senedd’s ability to deliver on its objectives and will have an impact on its ability to deliver on its manifesto commitments.

Of all the attacks on the devolution settlements in this Bill, this is probably the most blatant—so much so that the powers and responsibilities of our Parliaments do not even merit a mention. It is another example of the introduction of a new constitutional settlement by stealth, as I referred to in my speech on Monday. It is another item to add to the list of examples fuelling the interest in independence, which, under this UK Government, is reaching a level never seen before in Wales. People are witnessing the performance of an almost colonial Government emanating from Whitehall and comparing it with the more progressive Government and Senedd we see in Wales—a progressive Senedd that voted last week to allow councils to change the electoral system for local elections by introducing the STV system and open up the franchise for local elections to 16 and 17 year-olds in addition to their existing rights to vote in Senedd elections; importantly, it supported voter participation by paving the way for automatic voter registration.

I must admit, I am surprised that, after listening to concerns expressed by the noble and learned Lord in Committee and hearing the support for his stance from other noble Lords, the Government have not come back on Report with an amendment of their own that recognises and ameliorates the impact of this clause on the devolved Parliaments.

In a Bill about the regulation of the UK internal market, this clause and its assault on the devolution settlements has no place, and I support Amendment 64 to remove it. I hope that the noble and learned Lord will be minded to call a Division on the amendment. If he does, he will have the support of these Liberal Democrat Benches.

[Lord Naseby (Con)]

My Lords, I will speak first to government Amendment 66, on how the power in Section 42 will be used. There is a very welcome statement that there is to be an annual report, which can be fully debated in Parliament. We had some discussions about this in Committee, and this amendment is very welcome.

Turning to Amendment 64, I hope that the noble and learned Lord, Lord Thomas, will not find it offensive if I allude to the fact that I used to own ferrets. Ferrets are beautiful animals, very ingenious and very inquisitive—but of course they have one failing. Sometimes they succeed in catching or flushing out rabbits, but quite often they turn around, get distracted and think of something far less important. Listening to the noble and learned Lord’s introduction to his amendment, it was based, according to him, on finding in paragraph 3.1 of the Red Book something that he thought was relevant to this debate on Clause 42.

I am sufficiently brave to suggest that he has perhaps forgotten what the basic elements of this Bill are. On the front page, it says:

“To make provision in connection with the internal market for goods and services in the United Kingdom … to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges”.


This is what the whole Bill is about. So here we have before us an amendment which is a pretty wide-sweeping reversal of that primary purpose of the Bill. A whole new concept is being proposed in this new clause, at a time when the whole country faces massive challenges arising from Brexit.

After five days looking exhaustively at the Bill in Committee, lo and behold, here we are on Report, and this pretty revolutionary amendment is put forward. For me it is basically pre-empting the role of the Chancellor of the Exchequer and the Government of the day. It does not matter what the colour of the Government is: in structural terms it pre-empts the Westminster Government, setting up a whole new semi-department, with little oversight and, frankly, huge costs. There does not seem to be any constraint on it at all. In my judgment it is way outside the scope of the Bill and should be rejected.