United Kingdom Internal Market Bill

Baroness Randerson Excerpts

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

Certainly, the unhappiness of the Welsh Government is clearly expressed in their document. We should have—and I hope the Minister will be able to promise as much—a document setting out where they agree and disagree with the specific points made in the document which has been circulated.

[Baroness Randerson (LD) [V]]

My Lords, I regret that I was unable to take part at Second Reading, but that does not mean that I am not deeply concerned—[Inaudible.]

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

We seem to have a technical problem.

[Baroness Randerson (LD) [V]]

[Inaudible]—needed at all, certainly at this stage. The earlier parts of the Bill, which deal with the establishment of new rules to maintain the internal market now that we have left the EU, have received much less publicity than Part 5. However, these parts are just as constitutionally significant because, under the cover of Brexit, the Government are attempting to slip through the unravelling of devolution. They have claimed that this Bill will increase the powers of the devolved Administrations, which is akin to President Trump claiming that the virus is waning in the USA: the facts demonstrate its falsity, as the clauses in this Bill demonstrate multiple ways in which it undermines current devolved powers.

The UK’s internal market appears to function perfectly well at the moment. The barriers cited by the Government as the reason for this Bill are hypothetical and unlikely to materialise because they are clearly against the interests of the devolved Administrations. There is no clamour to diverge from existing standards set by the EU because they are both high and universally recognised. Therefore, taking the Bill at face value, it seeks to solve a problem that does not exist, but that judgment is rather too kind because the details betray the Government’s real purpose.

Until now, devolution in the UK has functioned under the umbrella of EU legislation. Most of the fundamental devolved powers have operated in that way, and EU regulation has been accepted with noticeably little argument because it operates on such a large scale that there is little perception of party-political bias. The new arrangements set out in this Bill will be very different. Obviously, England will dominate, come what may, but the Government are not content with relying on size alone. This Bill steals all the remaining cards from the devolved nations.

We have a ragged devolution settlement—lopsided, confused, and already under huge strain. Leaving the EU has destabilised it further. Because there is no proper devolution in England, UK Government Ministers are effectively hybrid Ministers. One minute they are acting as Ministers for England and the next they are UK Ministers. Indeed, in some cases, such as agriculture, the Secretary of State is largely just the Minister for England, so it is essential that there is a strong dispute resolution mechanism: there will be problems if that fell back on the Secretary of State alone. This Bill itself will become a protected enactment, which devolved Administrations cannot repeal or modify. However, the UK Parliament will, in practice, be able to override the market access principles when legislating for England. Hence it will have an inherently asymmetrical effect.

Looking at how the market access principles will be enforced, we see a much tighter definition than allowed under EU law. It narrows the territorial scope of devolved legislation, which will no longer be able to apply to all activity within that nation. The Senedd could still vote to ban a wide range of single-use plastic items, for example, but that ban could no longer be applied to products entering Wales from the rest of the UK, nor could it ban sales of those goods. Such a ban would therefore be pretty meaningless. Amendment 4 applies the Government’s own market access principles, but with a framework of respect for the decisions and views of the devolved nations. With all due respect to the noble Baroness, Lady Neville-Rolfe, the UK is not a supermarket. The nations of the UK have individual and proud heritages and identities.

The Government’s regulatory impact assessment recognises that the broad application of the market access principles will limit the ability of the devolved Administrations to introduce distinct approaches to environmental and social policy, which will of course undermine the fundamental purpose of devolution. In the interests of centralisation of power, the Government are attacking innovation. The freedom provided by devolution has encouraged new approaches, such as plastic bag pricing, in Wales and minimum alcohol unit pricing in Scotland and Wales. There is an insidious pattern in many of the controls in the Bill. It allows the status quo to stand in some instances, but removes the right of devolved Administrations to change regulations in the future. This looks like the path to a stagnating economy.

Amendment 4 seeks to strengthen the hand of the devolved Administrations so that their voice can be heard. It replaces the very weak duty to consult with a much stronger principle of consent. That would force the Government to return to a normal approach of partnership and respect. The Bill scythes its way through devolved powers, and the amendment attempts to tackle some of that. The Government have lately reminded me of a drunk in a bar, who swaggers around aggressively challenging the other customers over imagined insults and picking unnecessary fights. This really is an unnecessary fight with the devolved Administrations. Devolution was always incomplete and uneven, and UK identity has been stretched pretty thin recently. Throughout the Bill there is a thread seeking to reverse devolution and recentralise the state, and this Government simply must not be allowed to get away with it.

[Lord Dunlop (Con) [V]]

My Lords, I want to comment on some of the issues raised by the amendment. It is useful in that, so far as this Bill is concerned, it draws attention to—if I may put it this way—the dog that did not bark. The dog in this case is the agreement reached at the Joint Ministerial Committee in October 2017, between the UK Government, the Scottish and Welsh Governments and the senior civil servant representing the Northern Ireland Executive, on the principles to guide the work on common frameworks. There will be an opportunity to debate in more detail how common frameworks intersect with the Bill’s provisions in the next group of amendments, but looking at the JMC principles is a good starting point.

In its report on the Bill, your Lordships’ Constitution Committee, of which I am a member, concluded:

“We consider that adhering to the principles agreed for formulating common frameworks would improve the likelihood of reaching agreement on how to progress the Bill. We are not convinced that the opportunities for managing the UK internal market through the common frameworks have been exhausted”.


The JMC principles embody what can reasonably be assumed to be core UK Government concerns: the effective functioning of the UK internal market; compliance with international obligations; the ability to negotiate, enter into and implement new trade and international agreements; the management of common resources; and cross-border justice and security. They also address those issues likely to be of most concern to the devolved Administrations: respect for the devolution settlements; devolved competence not normally adjusted without consent; and equivalent flexibility for local tailoring of policies as is afforded by current EU rules, as we have heard.

One of the witnesses from whom the Constitution Committee took evidence— Professor Nicola McEwen from Edinburgh University—contrasted the approach adopted for common frameworks, which she characterised as a co-operative and co-owned process, with the provisions of the Bill, which she described as more top-down. It is fair challenge to wonder whether a top-down approach might be necessary because one of the participants in the common frameworks negotiations is often seen as provocative and difficult to deal with, and of course committed to the break-up of the United Kingdom. The introduction this summer in the Scottish Parliament of a second continuity Bill, designed to give Scottish Ministers powers to maintain dynamic alignment with the EU, might well have been seen by the UK Government in this light. However, I would make three observations about this:

First, the Welsh Government, who, unlike the Scottish Government, gave their legislative consent to the European Union (Withdrawal) Act 2018, are a unionist Government but nevertheless as concerned as the Scottish Government about the implications of the internal market Bill for devolution. Secondly, we have now had eight of the statutory quarterly common frameworks reports from the UK Government mandated by the 2018 Act. Each has confirmed that common frameworks are making progress and that the Government have not felt the need to exercise their power to freeze devolved competence to counter any imminent risk of policy or regulatory divergence. Thirdly, even at a time when relations between the UK Government and the Scottish Government are at a low ebb, and the Scottish Government initially insisted that they would withhold legislative consent as a matter of principle for all Brexit-related Bills, the Scottish Government have in recent months recommended legislative consent—albeit with some qualifications—to the Fisheries, Agriculture and Trade Bills.

In conclusion, the amendment in the names of the noble Lords, Lord Fox and Lord Purvis, seeks to inject into the Bill the spirit of the JMC principles—here I am concerned more by its spirit than its precise terms—and to provide a more co-operative intergovernmental architecture for taking forward the UK internal market, which is currently missing from the Bill. I therefore hope that Ministers—despite the challenges, which I do not underestimate—will not give way to pessimism about the governance of the union, nor give up on a collaborative “four nations, one country” approach to protecting free trade within the UK. As such, I hope they will work constructively to address the concerns raised about the Bill during this debate.

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[Lord Morris of Aberavon (Lab) [V]]

It has been a most interesting debate. I do not think I have anything to add. I await the Minister’s reply with great interest.

[Baroness Randerson (LD) [V]]

My Lords, the concept of common frameworks is notable for its absence from this Bill, as many noble Lords have said. For three years, they have been accepted as the way forward, on which the future operation of the UK internal market would be built. Now, they have been silenced.

I, along with a number of other noble Lords who have spoken on this and previous groups, am a member of the Common Frameworks Scrutiny Committee, ably chaired by the noble Baroness, Lady Andrews. I can report that common frameworks are alive and well and that a great deal of work has gone into them. There is general agreement from stakeholders, the devolved assemblies and UK Government representatives that they can provide a sensible and effective way forward. Amendment 6 seeks to flesh out the principles of co-operation on which they should work. That common frameworks process should be exhausted before the market access principles come into place.

The Government respond by saying that there is no need for common frameworks, as a concept, to be enshrined in legislation. I am sceptical. There are already signs that the Government are attempting to sidestep common frameworks—for instance, on the emissions trading scheme, where they have announced their intention to consider replacing it with a carbon tax, which would be a UK responsibility and would effectively take away the devolved powers. That is despite the fact that the common framework on this issue—emissions trading—has just about got to the final point. Despite the Minister’s assurances, I fear that the Government are poised to put the principles in the Bill into effect with the excuse that common frameworks have not proved workable.

Amendment 6 has cross-party support. Noble Lords have emphasised that it has been designed in consideration with the Welsh Government and reflects the well-founded concerns of the devolved assemblies. As with a number of issues, there is a lack of clarity on how common frameworks will link with the market access principles. Common frameworks set up a system—a framework—for the operation of markets, complete with dispute mechanisms. They allow for changing standards over time. So, I ask the Minister: how does this fit in with the provisions in the Bill that remove the right of devolved Administrations to introduce new standards in many circumstances? If the Government genuinely support common frameworks as the fundamental building blocks of the way forward, will the Minister agree to accept Amendment 6, which states that the Bill’s market access principles apply only after the common frameworks process has been exhausted? Will she clarify the relationship of the Bill to common frameworks? Will she accept our assurances that the Welsh Government, for instance, want common frameworks in the Bill?

Will the Minister also explain precisely how the measures in the Bill will guarantee that the devolved Administrations will be able to experiment and develop novel approaches, as they have in the past? That is how a great deal of social and environmental progress has been made in the last two decades. I give the example, used earlier in the debate, of single-use plastic bags. Wales experimented with the concept of paying for single-use plastic bags and was dramatically successful in reducing their use. The English approach to this, taken by the UK Parliament, was very sceptical, but Parliament saw that it worked and, in due course, England followed suit. Wales is an ideal size as an experimental sounding board.

Amendment 44 to Clause 9 refers to the non-discrimination principle. For clarity, can the Minister spell out to us where the requirement for the provision of, for example, labelling in the Welsh language would stand in relation to that principle? There is a legitimate reason for the need for Welsh labelling in certain circumstances, and as policy in relation to the Welsh language matures, it is fairly certain that there will be increasing demand and need for labelling in the Welsh language. How will that fit with the Bill?

United Kingdom Internal Market Bill

Baroness Randerson Excerpts

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

[Lord German (LD)]

My Lords, I shall address Amendment 54 in my name. As the noble Baroness, Lady Finlay, said in moving her amendment, it harks back to debates we have had on the mysterious absence of common frameworks from the Bill. As your Lordships will know, common frameworks are a way of doing business that is supported by the CBI. The amendment would insert a new schedule into the Bill. It may look arcane, or like an obscure pub quiz question, so perhaps noble Lords would like to answer the question: what unites ozone-depleting substances and Caerphilly cheese? The answer is that the list in the schedule is the list of subjects where all four Governments in this country have agreed that legislative common frameworks are necessary. However, this is not intended as an exhaustive list. It would be possible to add to this by secondary legislation if new areas emerge that require a common framework.

I concede that it would not have been necessary to have such a schedule if the dual carriageway with the brick wall in between the two approaches that the Government are taking—this Bill and the common frameworks—were guaranteed to coincide and meet. Both approaches are progressing and have the enthusiasm of the Government behind them. This amendment would be a way of ensuring that those approaches coincided and met. The amendment would help, since it identifies common frameworks without using the name.

One of the more striking aspects of the Bill, as noble Lords and Ministers keep telling us, is that common frameworks on their own cannot guarantee the integrity of the entire UK internal market. They are sector-specific and not intended to address the totality of economic regulation. In answer to every question asked, there has been a real silence from the Government, who have failed to identify any areas where the integrity of the internal market might be threatened that are not covered by common frameworks. We had reference to the threat to the sale of barley from English farmers to Scotland, which has proved an issue already resolved by the common framework. There is also the wholly hypothetical example of a devolved Government wishing to legislate for additives to flour, which is already in one of the common frameworks on nutrition.

We therefore have to manage this problem of having two-track approaches to the internal market. The amendment proposes a way of creating that gateway between the two and ensuring that there is a link between them, so that we know that we are on the same course for a functioning internal market.

[Baroness Randerson (LD) [V]]

My Lords, I have added my name to Amendment 174 in this group. I wish to speak to that and other amendments that I support.

Possibly the greatest asset that we gained from our decades of EU membership was the development of and assistance on the highest standards. In consumer and environmental protection, employment practices, public health standards, animal health and in the development of social policies, we have all benefited enormously and our quality of life has been greatly enhanced. Often, we as a nation were at the forefront of the development of those EU policies. On occasion, in our own legislation, we chose to adopt even higher standards, as my noble friend Lord Teverson said earlier. Those were the days when we really were world-beating. It is therefore very disappointing that the Bill contains nothing to guarantee high standards; there is no process set out to agree even minimum standards. The amendments in this group seek to rectify this, hence it is a legitimate aim to seek higher standards or to maintain existing standards.

Across the world, the experience of capitalism reveals that unfettered markets—capitalism in the raw—without a sound framework of standards often drive down standards to the lowest common denominator. For example, in the USA, hardly a country struggling for development, market access provisions unaccompanied by agreed minimum standards have led to deregulation as a way to attract business. It is well known as a ploy.

United Kingdom Internal Market Bill

Baroness Randerson Excerpts

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

The remainder of my amendments in this group relate to improving the Government’s structure along similar lines to those I have elaborated regarding my hypothetical independent OIM. Amendment 127 relates to an investigatory panel size of five not three, Amendment 128 says that panels must be drawn from all four nations, and Amendment 130 relates to transparency.

[Baroness Randerson (LD) [V]]

My Lords, I will speak to the amendments in this group to which I have added my name: Amendments 117 and 118, and Amendments 120 to 124. The noble and learned Lord, Lord Thomas of Cwmgiedd, and the noble Baroness, Lady Finlay of Llandaff, have also signed these amendments, which have been put forward with the agreement of the Welsh Government.

Clauses 28 to 40 of this Bill establish a new Office for the Internal Market, within the CMA, as other noble Lords have already noted. The OIM will have reporting, monitoring and advisory functions and information-gathering powers; it will monitor the health of the internal market and provide advice on the economic impact of proposals and regulations, including their impact on trade, investment and competition. It will publish reports available to stakeholders and devolved Administrations. The problem is that all this is to be provided within the existing structure of the CMA, which is a body established and designed to work within the UK Government structure.

These amendments relate to the status, role and membership of the CMA, which was established in 2013 as a non-ministerial government department, accountable to Parliament via its sponsor department, which at the moment is BEIS. Although the CMA works at arm’s length from the Government, BEIS gives it a strategic steer that outlines the Government’s strategic priorities. The Secretary of State appoints, or removes, the chair and board of the CMA, and it produces an annual report for the Secretary of State. It is the CMA which represents the UK Government abroad on relevant issues.

The CMA was designed to deal with purely reserved matters, whereas the Office for the Internal Market is designed to have functions in relation to the devolved Administrations as well. The OIM is therefore a mismatched limb, grafted on to the CMA. For instance, Schedule 3 includes measures to establish an OIM panel and task groups. The Secretary of State must simply consult the devolved Administrations before these appointments. That is inadequate, as it provides no guarantees of agreement from the devolved Administrations before appointments are made and no guarantees of balanced representation.

These amendments seek to address these problems and to be fully respectful of devolution, including requiring the Secretary of State to get the consent of the devolved Administrations to appointments, although with the provision that they must respond within one month so they cannot unreasonably hold up the work of the OIM. Importantly, these amendments would also adjust the structure and relationship of the CMA so that it will no longer be a purely UK Government and parliamentary vehicle. The DAs would each be able to appoint and remove a CMA board member, subject to the usual five-year term and the CMA’s annual plan and annual report would be laid before the devolved legislatures as well as Parliament. Thus the parent organisation, the CMA, is structured to ensure that its offshoot, the Office for the Internal Market, works genuinely for all parts of the UK.

I spoke in an earlier debate about the hybrid role of UK Ministers, who are expected by this Bill to operate at one moment as English Ministers, acting in the specific interests of England, then to switch hats into their UK role and act as impartial arbiters between the interests of the four nations. This Bill requires a similar constitutional contortion from the CMA in relation to its baby, the Office for the Internal Market. There is a reason why the referees in Saturday’s rugby internationals did not come from either of the nations represented on the field—and we all know that. You cannot guarantee an even-handed approach unless you have the structures in place to ensure that, and it has to be built into and throughout the appointments of the organisation, into its remit and reporting processes.

[Lord Thomas of Cwmgiedd (CB) [V]]

As the noble Baroness, Lady Randerson, has very carefully explained the purpose of these amendments, I can be much briefer than I had intended.

The amendments are directed at the CMA and the Office for the Internal Market as set out in the Bill, but the principles behind these amendments would apply to any different structure that emerged, as the noble Baroness, Lady Bowles of Berkhamsted, envisaged. It seems to me that the critical point for this House to consider is that whatever structure is established must command the confidence of all the nations of the United Kingdom. Secondly, it is obvious that there will have to be a body that exercises independent powers and makes judgments that may go against one part of the United Kingdom or another part of it.

Thus, it is important to ensure, as these amendments seek to do, that the appointments both to the Competition and Markets Authority and to the office for the internal market take into account the change in the CMA’s role and cater for the new role of the OIM—assuming that these roles will be given to them when the Bill emerges from Parliament.

It seems to me that there is one useful analogy to make. Because the CMA has certain quasi-judicial and independent functions, it must be set up in such a way that those who are affected by its decisions know that those appointed to it have their confidence. They must also have a proper knowledge of the different constituent parts of the UK. When this House enacted the Constitutional Reform Act in 2005, a statutory provision was included that there had to be judges from Scotland and Northern Ireland; Wales was dealt with as part of England, and I will say nothing about that today. But recent experience of devolution legislation has shown how important it is for a body such as the Supreme Court—and for this body—to have representatives who know and understand the position in each of the constituent nations.

I need not elaborate on the detail of how this provision will work. I stress that the body must comprise those who understand the different nations of the UK and are able to provide it with confidence in its decision-making. It must address the point to which the noble Baroness, Lady Randerson, referred—namely that, more and more, Ministers are seen not simply as UK Ministers but as Ministers of England.

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

My Lords, it is a pleasure to follow the noble Lord, Lord German. I would like to build on some of his questions, particularly the question of who administers the funds, especially in relation to regions and local authorities in England.

I am grateful to the noble Lord, Lord Stevenson, for his Amendment 132 and for the chance to debate Clause 48 stand part. The noble Lords, Lord German and Lord Stevenson, and a number of others, asked about the situation going forward in respect of the Barnett formula. Is it the Government’s intention that that will remain in place, or is it the implication of this part of the Bill that the formula will be replaced by a new shared prosperity fund on the criteria that we are currently debating here?

My main concern as someone living in England, albeit of Scottish descent, is about the shared prosperity fund. Who will administer it and to whom will applications be made? How will a balance be reached between rural and urban areas? I declare an interest as a former MP in North Yorkshire for 18 years. I was delighted by the announcement in February this year that £6 million of funding has been allocated for a rural connectivity project in North Yorkshire with the specific task of helping to unlock the rural economy’s potential. It will be to the benefit of farmers and rural communities to support superfast mobile connectivity and rural broadband generally.

Looking at Clause 48(2) as it currently stands, however, rural broadband or broadband and mobile connectivity simply do not appear. Does that mean that, whichever nation or local authority or region you live in, once this shared prosperity fund comes into effect, these funds will disappear? Funds that have only just been allocated this year, presumably, under the existing European Regional Development Fund, will run their course. Is my understanding correct that the omission in the Bill of connectivity—either rural or urban, in whichever nation or region we happen to live in—means that it has been dropped from the shared prosperity fund? I will be interested to know and understand why, in particular, infrastructure has been limited in Clause 48(2) to,

“water, electricity, gas, telecommunications, sewerage or other services (for example, the provision of heat) … railway facilities (including rolling stock), roads or other transport facilities”.

It goes on over the page. I am severely disappointed—I am sure that others living in rural areas will feel the same way—that rural connectivity is being overlooked. It is not acceptable in this day and age that special provision is not being made for rural areas. The 5% who are the hardest to reach are being overlooked. I understand that the Scottish Government have given very generously to rural businesses in this regard, to their benefit and that of English customers who are buying from them.

I want to repeat a question posed by a number of other noble Lords: what is happening with regard to match funding? Will it continue to be required as it was under the ERDF and the European structural funds? How will economic development be administered? Is it going to be the case that local authorities such as North Yorkshire, Ryedale District Council, Hambleton District Council, Harrogate District Council or York City Council will have to go cap in hand to the Government? At this stage, it will be interesting to have more flesh on the bones of Clause 48. Who will determine what the balance is to be in applications from rural and from urban areas?

On the much-vaunted policy of the levelling-up agenda set out so effectively in the Government’s manifesto and to which they promised to commit themselves during the life of this Parliament, and which I entirely support, what role will the shared prosperity fund have in levelling up the regions and local authorities?

I want to end on this note. The noble Lord, Lord Stevenson, referred to the ERDF and structural funds having regard to levels of deprivation. It is not generally understood that rural areas have pockets of deprivation that are every bit as bad as those which are generally better known and recognised in urban areas. With these few remarks, I look forward to the answers from my noble friend.

[Baroness Randerson (LD) [V]]

My Lords, this is a very important group of amendments because they deal with another recentralising measure in this Bill; that is, powers for the UK Government to spend money on wholly devolved areas of competence. Let us remember that power without spending power is hollow. At the least, this is a petty pot-shot at the devolved Administrations, while at the worst, it will lead to a direct conflict of policies and a huge waste of taxpayers’ money.

Let me give a hypothetical example on environmental spending. You could have the Welsh Government subsidising wind farms and the UK Government paying to close them down. Before anyone scoffs at that idea, in relatively recent years the Conservatives in Wales have campaigned against wind farms. In the best case scenario, it will lead to disjointed rather than joined-up policymaking.

The list of specified policy areas goes well beyond the usual devolved areas, so this is clearly a naked power grab. However, all of this is unnecessary because the UK Government can and do spend money on the devolved areas, but they do so in partnership with the devolved Administrations. City deals are a prime example of this successful approach. In these deals, the UK Government will set out pretty stiff conditions for additional funding. They do not simply hand over the cash. If we take the example of higher education, universities in Wales and Scotland receive funding from UK research funds, and here I declare an interest as chancellor of the University of Cardiff.

If the Government feel that they are not getting full recognition for their funding, they should take a leaf out of the EU’s book and put a badge on it. As the noble Lord, Lord Dunlop, said in his truly excellent speech, they should not just fund and forget. In 2012 in the Wales Office, we recognised that the Welsh Government did not have enough capital funding for the significant infrastructure improvements that were needed if Wales was to compete economically. We gave the devolved Administration additional borrowing powers and we worked with the Welsh Government to agree a shared programme of funding for, for instance, the South Wales Metro. We worked with the grain of their views, but we still set the framework. Now I hear that the UK Government are threatening to build the M4 relief road, which the Welsh Government and local people have rejected.

Looking back to the days prior to devolution in Wales, there used to be huge rows about the smallest details of how social and economic support from the EU should be spent. Often, rather foolish decisions would be made by central Government, which were basically too remote from the areas concerned. The proposals in this Bill threaten a return to that centralised, counterproductive approach.

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[Lord Thomas of Cwmgiedd (CB) [V]]

I can be very brief in speaking to Amendments 151 and 152, which stand in my name. They relate to matters that were discussed earlier. The first deals with the need to insert into the Bill provisions to ensure that the Competition and Markets Authority—if indeed it is to be the body that plays a central role in the Bill—consults the devolved Administrations in relation to its policy for enforcement.

The second amendment deals with penalties. The Minister has a regulating power and the amendment proposes that the penalties are made with the consent of the devolved Governments. That is obviously in line with what I hope will be the approach of the Government —that is, to work with the devolved Administrations. The reasons were set out earlier and I need not repeat them.

[Baroness Randerson (LD) [V]]

My Lords, like the noble and learned Lord, Lord Thomas, I will be very brief. I have added my name to his amendments, which simply reiterate the need for the CMA to consult the devolved Administrations, as well as the Secretary of State, and to obtain consent. They emphasise the importance of respecting devolution. I say to the Government that small things count. They guarantee good and fair government. It is important that the Government take note of the tone of the debates this evening and pay that respect to devolution in the terms in which the CMA operates in the future.

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

My Lords, these amendments are part and parcel of the approach that my noble and learned friend Lord Thomas and I, and indeed the Welsh Government, have advocated. It seems essential to ensure that the office for the internal market is genuinely independent and accountable, on a basis of equality, to institutions in all four parts of the UK.

I want to take this opportunity to seek clarification on some of the powers that the Government propose to give the office. I understand that it would be able to compel persons to provide information and impose financial penalties on those who do not. I can see why these powers are necessary for the Competition and Markets Authority when it investigates matters of anti-competitive practices which possibly violate the criminal law. However, can the Minister please explain why the powers are necessary in the very different circumstances of providing independent advice on the potential internal market implications of measures proposed by a Government?

More specifically, one point in particular needs clarification. It is my understanding that devolved Ministers could not be compelled to provide such information, as, like UK Ministers, they are covered by Crown immunity. However, I am informed that such immunity does not extend to the devolved legislatures, meaning that the Senedd Commission could be compelled to provide information and fined if it did not. This seems wholly unacceptable, and I seek clarification.

United Kingdom Internal Market Bill

Baroness Randerson 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 Rooker (Lab) [V]]

My Lords, I reflect from the debate so far that the leadership of the main political parties at Westminster would do themselves a favour if they studied the speech of my noble friend Lord Foulkes. I will not go over the detail, but there were sufficient warnings there from someone who has had experience of the Scottish Parliament, the House of Commons and the House of Lords that really need to be listened to.

The first four speeches, from the noble and learned Lord, Lord Hope, the noble Baroness, Lady Finlay, the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lord, Lord Bourne, were masterclasses in argument in favour of the union, going well beyond this amendment. To be honest, I must tell the Minister that this is not a modest amendment, as far as I am concerned; no way is it a modest technical adjustment of the Bill.

This Bill, as was said earlier, destroys policy divergence. It is a one-size-fits-all Bill; to that extent, it is a rejection of devolution. I well remember the examples that my noble friend Lord Foulkes gave, as will the noble Lord, Lord Cormack. Take the 1974-79 Parliament; it was always at 10 o’clock at night that we got Scottish business, on housing and education, and we were on a three-line Whip, with slender government majorities or, most of the time, no government majority. We always thought, “Why can’t Scots deal with this themselves? This is a different legal system, which most of us do not understand.” Moreover, there was never enough time for those representing Scotland, who did understand it, to debate the matters fully. Born out of that was devolution.

My experience, which I will not go into in detail, was as a Minister at the ODPM and MAFF—which had massive contacts with the devolved Administrations simply because of the devolution of food, farming and agriculture—and then at the Food Standards Agency. At the time, the Scottish Government were in effect forced to set up their own food standards agency, as they were entitled to do by the legislation. Wales and Northern Ireland may well do the same—the legislation allows them to do it—because they will be forced into the situation as a result of issues such as this Bill.

I do not quite understand this issue of complementary arrangement. I spent a bit of time while listening to everybody’s speeches going through my dictionaries, thesaurus and everything, and I still do not understand it. There seems to be no connection between the common frameworks set-up and the Bill. If that is the case, I cannot for the life of me see how there can be any complementary arrangements. The Bill overrides the other processes; there is no connection whatever to that extent. Amendment 1 puts in a connection, which is crucial.

In terms of divergence over what is required with imports, the UK Government will take no account of what happens in the common frameworks process if the Bill goes unamended. Again, it will be one size fits all. The trade department will do the trade deals and take no account whatever of any desired or agreed policy divergence between the four constituent parts of the UK.

The Prime Minister has made the position crystal clear. It does not matter how much spin he puts on it or how many weasel words come from him and his acolytes; the fact is that he said that

“devolution has been a disaster north of the border”.

That is a fundamental attack on devolution; it would not matter who was in charge north of the border. He said it was a fundamental mistake of Tony Blair, but he later tied it to the actions of the current Government in Scotland; he did not say that to start with. He was fundamentally opposed to devolution. You cannot compare the devolution of the Mayor of London with what happens in the Governments of Scotland, Wales and Northern Ireland.

The union is at stake. Ministers seem to gloss over this. I think we are on our way to a federal Great Britain. I give full support to this amendment, which is fundamentally required. This is nothing personal, but I have never seen a spark of conciliation from the noble Lord, Lord True—I am sure he will take that from me as an absolute compliment—and I do not expect him to be at all conciliatory to what the noble and learned Lord, Lord Hope, has said, and in due course I expect to vote for the amendment.

[Baroness Randerson (LD)]

My Lords, I congratulate the noble and learned Lord, Lord Hope, and his fellow signatories on these amendments. Amendment 1 neatly turns this Bill on its head, so that market access principles will not apply to any decisions to diverge that are agreed through the common frameworks process. That means that common frameworks come first, and it is only when they do not provide complete cover that the provisions of this Bill need to come into effect.

The Government have maintained throughout these debates that they remain committed to common frameworks, despite their determination to avoid even mentioning them in the Bill. They have insisted that all they want to do is fill the gap left by our leaving the EU and that they have no intention of attacking devolution. The mask slipped on Monday when the Prime Minister called devolution a “disaster” and “Tony Blair’s greatest mistake”—which makes it a greater mistake than the Iraq war. The cards are now on the table.

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[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

I have received only a single request to speak after the Minister, so I am going to call the noble Baroness, Lady Randerson, to ask a short question of elucidation.

[Baroness Randerson (LD)]

The Minister cast doubt on warnings about the impact on devolution. Has he looked at opinion polls in Wales tracking support for independence? That is a country that only 20 years ago very narrowly accepted devolution. It is a country that voted for Brexit, and one that is governed by a Labour-Lib Dem coalition—two unionist parties. You can see in that country the clear feeling about the way in which this Government are behaving.

[Lord True (Con)]

My Lords, I am not sure that is directly relevant to the subject matter of the Bill. I thought I had in fact made the point that imputation of motive and intent is a political choice that should be exercised wisely. This Government’s intention in this Bill is in no way to undermine the devolution settlement and I have restated, from this Dispatch Box, our commitment to the common frameworks. As for opinion polls, if I were a Liberal Democrat I would not live by them.

United Kingdom Internal Market Bill

Baroness Randerson Excerpts

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

[Baroness Randerson (LD) [V]]

My Lords, I speak in support of the amendments. The internal market must be based on high environmental standards, as well as supporting progressive improvement, but there is nothing in the Bill to ensure that this happens—hence the amendment. There is no reference to common frameworks to support higher standards, and there is no non-regressive provision to prevent standards falling. Taken together, this could easily lead to a deregulatory race to the bottom, and have a chilling effect on attempts to improve environmental standards.

It is important to remember that improving environmental standards can be controversial in practice, even though there may be no debate about the science behind them. For example, in the early days of the pandemic, the Government very commendably made money available and encouraged councils to put in place new cycle lanes and pedestrianised areas—a policy which we would all agree is good for our health and for the climate. However, many councils found this very difficult to do in practice, and some backed down in the face of fierce opposition from motorists. Wandsworth council, for example, was one of those concerned.

So in this Bill, while devolved Administrations will not be legally prohibited from introducing new environmental standards, under the market access principles, incoming goods from the rest of the UK will not have to meet these new and higher standards—hence fundamentally undermining attempts at improvement. This is in contrast with EU law, which has created coherent shared mechanisms. The EU also allows countries to go beyond commonly agreed standards to protect the environment, such as by banning particular types of packaging. However, there is no possibility of derogation from mutually recognised requirements in the Bill, as envisaged by the Government.

Amendment 23 refers specifically to environmental standards, but the principle also applies to public health and to standards across the board. That undermines efforts at innovation, a key factor in all successful markets. In Committee, the Minister confirmed that exclusions are

“intentionally narrowly drafted, to ensure that there are no unnecessary trade barriers.”—[Official Report, 28/10/20; col. 339.]

Can the Minister explain how the Government have come to the conclusion that setting higher environmental standards or higher standards of public health creates a barrier to trade?

In the other place, the Government created an exclusion for pesticides, which was not initially in the Bill. Can the Minister explain why this is important, but not other environmental factors? Just as over the decades we have become increasingly aware of the dangers of pesticides, so we have been on a similar journey of discovery over plastics. Well over a decade ago, the Welsh Assembly voted to introduce a charge for single-use plastic bags. The reason was that there was concern that they did not break down in the environment, that they lasted for hundreds of years and that animals died after getting tangled up in them. After some protest, England followed, because it saw the success in Wales of that policy. A decade on, we know so much more about plastic and the microscopic particles that we all ingest, either directly from plastic bottles, or indirectly, for example from fish which have themselves ingested particles.

My point is that yesterday’s experiment becomes today’s norm. Wales wants to ban nine different types of single-use plastic next year, and England—via the UK Government, of course, but the Government for England in this case—seems to be thinking of banning only three. If the Bill is passed without amendment, the efforts in Wales to lead in this field will in practice be totally undermined.

I will finish with another example. Next year the UK Government want to ban the sale of house coal in England. This Bill would mean coal from Wales could still be sold in England and would thus undermine standards that the Government wish to set for England. It is important to remember that what applies to one nation applies to another. I support the amendment.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this has been a very interesting debate for a number of reasons, which I shall come back to as I conclude. The noble Baroness, Lady Noakes, as she often does, focused on the key issue in play here: where we best situate the balance in an internal market that is as integrated as we currently have, which needs and respects clearly harmonised rules but also allows for joint processes which allow individual parts of the market to develop at different rates in different places. I think we agree that that is the key issue but differ on where the balance must lie and whether it has to be uniform as much as the Bill seems to suggest it will be.

The main interest in this debate has been in focusing our minds on areas that we have not really touched on in recent groups. We have looked at goods and services and at qualifications and how they might be harmonised, and we are coming back to services and qualifications later in our debates this evening. The points made by the noble Lord, Lord Wigley, about whether current policy might be adapted because of the impact of this Bill when it becomes an Act need an answer, and I would be grateful if the Minister could respond in particular to that point. Is there a particular hook in this Bill that will cause difficulties across the devolved authorities?

Secondly, on the point made by my noble friend Lord Hain, could it have an adverse effect on current processes so that, for instance, we would lose the local benefit policies to which he referred? Thirdly, on the point raised by my noble friend Lord Liddle, if there are good and valuable initiatives on local growth and support for sectors that are perhaps subsets of the national economy that are appropriate and best organised and run from a local point of view, how will they be affected by the way in which the Bill imposes a straitjacket on the various initiatives that we want to see come forward? I look forward to hearing from the Minister.

--- Later in debate ---

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

The noble Lord, Lord Liddle, has withdrawn, so I call the next speaker, the noble Baroness, Lady Randerson.

[Baroness Randerson (LD) [V]]

My Lords, I am pleased to see some amendments from the Government in this group. It may be the start of a little bit of emotional intelligence on the Government’s part, to see the damage that has been done to trust and confidence between the UK Government and the devolved Administrations on this issue.

However, on its own, government Amendment 55, for example, is too weak, in saying that in order to be appointed to the OIM panel, all you need is knowledge of the internal market in the different countries of the UK. That implies to me that anyone who worked, for example, for Tesco—I am not picking on Tesco; other supermarkets are available—in its London head office would, of course, know that there are different markets in different parts of the UK. However, they would not have the depth of knowledge to understand, for example, the importance of signage in the Welsh language in different parts of Wales or the difference in marketing approach required in different parts of Northern Ireland, bearing in mind the history of those parts. It is a subtle business, and it needs strength and understanding in depth.

The truth is that the OIM is being shoehorned into the CMA simply because the Government have made a promise that they are not going to create any more such bodies. They can go ahead saying, hand on heart, that the CMA is the body and the OIM is simply an arm of it—no new body has been created. But, to be honest, it is not a neat and natural fit.

Amendment 56 goes a little way towards seeking the consent of the devolved Administrations to an appointment, but it still leaves all the cards in the Government’s hand. Taken alongside Amendment 57, it makes it clear that if the devolved Administrations withhold agreement, after one month the Government can go ahead anyway—yet they might be withholding agreement for a very good and clear reason. I urge the Minister to look again at the stronger amendments, Amendments 54 and 59, tabled in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. If the Government mean what they say about genuinely wanting to respect the devolved Administrations and treat them with respect, what harm do the Government think it would do to allow them to appoint one board member each? The Government’s response is that it would make the CMA political. That in itself portrays the fact that the Government have a political approach of their own to this problem.

In conclusion, as the noble and learned Lord, Lord Thomas, pointed out, UK government Ministers are in fact—[Inaudible]—and then they change hats to become Ministers of the UK. This is a problem, and if anyone does not understand that that is a problem, it underlines a lack of understanding and experience of devolution. Anyone who had that experience and understanding would realise that the Government must give a little bit more to satisfy trust among the different Governments of the UK.

[Lord Naseby (Con)]

My Lords, I congratulate my noble friend on the Front Bench. Once again we see the benefit of a good Committee stage, with someone listening and coming back with a series of amendments which all strengthen the Bill. I particularly like the clarification in Amendment 56, and I was delighted to read Amendment 61. However, regarding Amendment 54, I have had the privilege of chairing four different companies and sitting on other boards, some of which had certain dimensions to them as a business that any wise chairman would wish to make sure were covered.

I am also a political animal. Anybody who has sat for a marginal seat and kept it understands the sensitivity of varying wards, varying interests et cetera, and I ask my noble friend to reflect a little on Amendment 54. Certainly I do not believe that there is anything in Amendment 59 worth having, but Amendment 54 is crucial. Whether the wording is right or not, nevertheless, the devolved powers are a very important dimension of the whole of this internal market. Somehow, as other noble Lords have said, they must have ownership of it. The CMA board is in essence one of the absolutely key elements of that. I do not expect an answer tonight, but I suggest that the Minister and his colleagues should sit back and argue this through. I understand what my noble friend Lady Noakes said. In one sense she is right but, with my political hat on, I am not so sure. So I ask the Minister to reflect a little on Amendment 54, although I do not expect him to accept it tonight.

United Kingdom Internal Market Bill

Baroness Randerson Excerpts

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

[Baroness Randerson (LD) [V]]

Clause 44 says it unequivocally: the UK Government, also parading as the English Government in this Bill, are specifically removing from the devolved Administrations their power to provide state aid, by inserting it as a specific reservation or excepted matter in each of the devolution Acts. When I said in earlier debates that the Government were using the Bill to roll back devolution, the Minister insisted that devolved Administrations were being given additional powers. We have already seen in these debates that the Government are using the Bill to sideline and undermine the common frameworks, which have been well established as the basic foundation for the future internal market. At the same time, the Bill removes any incentive for devolved Administrations to develop improved standards. Removing from the devolved Administrations the powers over state aid is fully in line with the thrust of the Bill, which is a barely disguised attempt to emasculate devolution.

I want to concentrate on how this Bill affects Wales, and Clause 44 refers to the Government of Wales Act 2006. In relation to this issue, that Act says:

“The First Minister may give financial assistance (whether by way of grant, loan or guarantee) to any person engaged in any activity which the First Minister considers will secure, or help to secure, the attainment of any objective in the Minister’s functions.”


In Field 4 of Schedule 5, it lists economic development as one of those functions.