United Kingdom Internal Market Bill

Baroness Ritchie of Downpatrick Excerpts

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

Many of us would be reassured if, before Third Reading, Ministers were able to show a willingness—reciprocated by the devolved Administrations—to engage constructively with the objective of producing the draft of such a fresh memorandum of understanding, together with proposals for a common way forward on resolving disputes. Building on the common frameworks process, agreed jointly and implemented co-operatively, surely provides us all with a better way forward.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I am delighted to follow the noble and learned Lord, Lord Wallace of Tankerness and I support the amendments in this group in the name of the noble and learned Lord, Lord Hope of Craighead. I declare an interest as a member of the Common Frameworks Scrutiny Committee.

The purpose of this important group of amendments is to safeguard the common frameworks process and ensure that it is placed in legislation. The common frameworks process cannot be bypassed by attempts by the Government to impose themselves on the constitutional devolution settlements. I agree with the premise that the amendments seek to ensure that primacy and due recognition are given to the common frameworks and that they are enshrined in legislation. They should not be perceived by the Government as a means of conflict with the internal market Bill. As the noble and learned Lord, Lord Falconer of Thoroton, has said, there has to be frictionless trade and divergence by agreement. The best way to capture that is by ensuring that common frameworks sit within the legislation itself.

Common frameworks are built on the assumption that consent and agreement can be reached between Westminster and the three devolved Administrations and that they should not be undermined. The process of common frameworks should be respected and honoured in the legislation and should not be eclipsed in any way. It is interesting that in our Common Frameworks Select Committee yesterday Professor McEwen said that the process of common frameworks has sufficient flexibility to allow divergence. That builds on the comment of the noble and learned Lord, Lord Falconer. In Committee, it was said that the legislation is seeking to jettison the common frameworks process that was started in October 2017. In many ways it is a common approach to managing divergence, a point made to our committee last week by the Welsh Counsel General, Jeremy Miles.

The Governments have been working on a primacy or a hierarchy of Governments in this to develop common frameworks in areas where they agree it is necessary to replace EU regulations with shared EU regulations or non-legislative frameworks. The Joint Ministerial Committee made clear that common frameworks will be established where they are necessary in order to, among other things, enable the functioning of the UK internal market while acknowledging policy divergence. These points have been made by earlier speakers today. It was clear from listening to the Ministers from the Scottish and Welsh Governments last week that, although they come from different political perspectives, they see the benefits of working together in partnership to manage divergence on certain policy issues through the common frameworks. So why would the Government want to nullify that process? It is surely eminently complementary that they can work together in legislation with the regulations of the United Kingdom Internal Market Bill.

I make a plea to the Government and the Minister to change their minds and make such provisions for common frameworks in the legislation. By abstracting the internal market from these frameworks and pushing ahead unilaterally, against opposition from the devolved authorities in Scotland and Wales, the UK Government are putting the common frameworks and devolution arrangements at risk. Coming from Northern Ireland, I fully recognise that there will be divergence anyway in Northern Ireland because certain measures to do with electricity transmission and the agri-food industry will be subject to the rules of the Northern Ireland protocol. What is the Government’s view of the devolution settlements? Do they view the devolved Administrations as subordinate or equal to Westminster, which I believe they should be? Common frameworks should be allowed to work; they are an innovative process to manage divergence.

Like the noble Lord, Lord Wigley, I hope that the Minister is in a conciliatory mood today and that he can accept Amendment 1 and Amendments 38 and 51 which are consequential. The noble Lord, Lord True, said that the Bill and common frameworks are complementary as they work together to deal with future divergence. The best way to deal with that is, surely, in the internal market Bill. That would eradicate the frustrations and any difficulties, which is an important thing to do.

[Baroness Andrews (Lab) [V]]

My Lords, I will speak briefly in support of the amendment in the name of the noble and learned Lord, Lord Hope of Craighead. Before I do so, I thank the noble Lord, Lord True, for his graciousness in coming to speak to the Common Frameworks Scrutiny Committee, which I have the privilege of chairing, and I follow my esteemed colleague the noble Baroness, Lady Ritchie of Downpatrick, in her speech.

The Committee has since taken evidence from Ministers and leading academics across Scotland, Wales and Northern Ireland. I have to tell the Minister that we have found no evidence whatever to support the Government’s claim that the Bill is complementary to the common frameworks. We have heard, time and again, of the deep anxiety on all sides that the Bill undermines them in principle and practice and that, most significantly, it will do serious harm to trust and confidence between the four Governments, as the House has already heard this afternoon. In the words of many witnesses, those relationships have never been worse. We have heard from those witnesses of many examples of how the common frameworks themselves, in pioneering innovative, collaborative ways of working across the nations, have brought a new common purpose and are, in that way, improving relationships.

My first question to the Minister has been asked already: is this not in itself a prize worth keeping? That unity of purpose which makes it possible for two systems to live together to make the internal market stronger and more innovative is at the heart of the amendment in the name of the noble and learned Lord, Lord Hope of Craighead, which he introduced, as usual, in a measured style and with devastating power. The amendment encapsulates both the principles and the purpose of the common frameworks as a means of managing the internal market, but in a rational and predictable way by managing the future divergent policy choices made by the four countries in a post-Brexit world, as they have for many years in the past.

Divergence is the signature and symbol of devolution and a mark of confidence in the right to make choices in each country, in law, which are appropriate to each nation. Doing that brings clarity and stability in the trade in goods and services across the internal market by agreement. The amendment simply asks the Government to change the Bill so that when the common frameworks have reached agreement on divergence, whether in goods or services, that is not demolished or overridden by the operation of the Bill.

No matter what examples the Minister gives, or whatever rationale he finds, this is the effect of legislation made in Westminster. Governments may be equal, but Parliaments are not. The Minister may say that nothing is being taken away from the powers of the devolved Governments in these clauses, and he is right. The Bill does not need to do that. Its effect, however, is the same, because future legislation in Wales which would, say, have enabled the abolition of a further six types of single-use plastic—which is the ambition—would not be able to be put into effect as long as other manufacturers of plastic goods are able, as they will be under the principles of mutual recognition and non-discrimination, to bring their goods for sale in Wales.

I shall ask the Minister a direct question, and I would very much appreciate a direct answer. Was the Welsh Attorney-General right when he told the Common Frameworks Scrutiny Committee that the legislative preferences in the Senedd could not be enforced on the ground in Wales—that we would not be able to enforce the ban on the extra six plastic products if this Bill came into force? “Enforcement” is the key word. The noble and learned Lord, Lord Hope, was eloquent on how difficult is going to be for trading officers and the courts to know how to enforce it. There is no certainty here, yet certainty is at the heart of the Government’s argument. All this very modest amendment is asking is for the Government to acknowledge this and stop dodging this reality.

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

My Lords, it gives me great pleasure to speak to and move Amendment 6, which I hope is self-explanatory. It seeks to clarify the meaning of Clause 5(3), regarding the effect of the statutory requirement under Clause 6. It should have read, just for greater clarification, “A relevant requirement (see section 6) is of no effect in the destination part but only if, and to the extent that”. That is a compromise we reached for greater understanding of the text.

The effect of Clause 5(3) will be to render a discriminatory statutory provision in UK or devolved legislation of no effect. I warmly thank the noble Lord, Lord Foulkes, for co-signing this amendment. In Committee, we had reservations about the meaning of “no effect”, because it lacked clarity. That was the view put forward by the Law Society of Scotland, which has helped me to draft this amendment.

My noble friend Lord Callanan confirmed in Committee that:

“Clause 5(3) will operate so that any future requirements that fall within the scope of the non-discrimination principle will be of no effect to the extent that they are discriminatory. For the benefit of the lawyers, this does not mean that the requirement is to be treated as if it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effects.”


The amendment therefore seeks to emphasise that the lack of effect relates only to the discriminatory element of the statutory requirement and does not otherwise affect the validity of the requirement. I hope that my noble friend will take the opportunity to confirm that that is the case.

There is also concern about the application of Clause 5(3) to a statutory provision in an Act of Parliament. My noble friend Lord Callanan confirmed that:

“As the Bill deals with trade across the whole of the United Kingdom, the intention is that this will apply to all legislation: secondary legislation, primary legislation passed by devolved legislatures and legislation passed by the UK Parliament.”—[Official Report, 28/10/20; col. 251.]


Under Clause 49, legislation means, inter alia, primary legislation, which includes an Act of Parliament. Therefore, we know that this provision means that such an Act will be of no effect to the extent that it is discriminatory under the Bill. I am minded to repeat the words of the noble Lord, Lord Beith, who mentioned that secondary legislation can be open to interpretation by the courts. I would be most grateful if my noble friend could clarify and further benefit us with his understanding of this provision.

I also comment briefly on Amendment 24 in the name of the noble Baroness, Lady Ritchie of Downpatrick, and others, with which I have some sympathy, as it ensures continued compliance with the principle of non-regression in Article 2 of the Northern Ireland protocol. That is a worthy aim, and I admire the enthusiasm and energy with which the noble Baroness, Lady Ritchie, has pursued this in the interests of her nation. With those few remarks, I beg to move and wait to hear the response of my noble friend to this little debate.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I speak in support of both amendments in this group. The noble Baroness, Lady McIntosh of Pickering, has already explained the purpose of Amendment 6. Amendment 24 is in my name and those of the noble Baronesses, Lady Suttie and Lady Bennett of Manor Castle, and the noble Lord, Lord Hain.

We have been contacted by the Equality Commission for Northern Ireland and the Northern Ireland Human Rights Commission, which have agreed to act as a dedicated mechanism responsible for the monitoring, supervising, advising and reporting on and enforcing the UK’s commitment, under Article 2 of the Northern Ireland protocol to the withdrawal agreement from the end of the transition period. They believe that this amendment is needed to ensure that the Bill is brought into compliance with the UK’s obligation under Article 2 of the protocol to the EU/UK withdrawal agreement.

The problem with the Bill as currently drafted arises when Clause 5 is read in conjunction with Clause 6. The commissions’ research only came to light while we were in Committee, as they were awaiting senior counsel’s advice, hence the only opportunity to have brought forward this amendment is now, on Report. I thank all noble Lords who have signed the amendment and hope that your Lordships’ House accepts that explanation.

Clause 5(1) provides that:

“The non-discrimination principle for goods is the principle that the sale of goods in one part of the United Kingdom should not be affected by relevant requirements that directly or indirectly discriminate against goods that have a relevant connection with another part of the United Kingdom.”


It may appear, on superficial reading, that Clause 5 applies only to goods and not, for example, to statutory requirements regarding employment conditions. This is incorrect, however, because Clause 6(3) provides details of what constitutes “relevant requirements” for the purposes of Clause 5(1):

“A statutory provision is within the scope of the non-discrimination principle if it relates to any one or more of the following—


(a) the circumstances or manner in which goods are sold (such as where, when, by whom, to whom, or the price or other terms on which they may be sold);


(b) the transportation, storage, handling or display of goods;


(c) the inspection, assessment, registration, certification, approval or authorisation of the goods or any similar dealing with them;


(d) the conduct or regulation of businesses that engage in the sale of certain goods or types of goods.”


The effect of these provisions, therefore, is to bring statutory provisions regarding employment conditions, including legislation regulating wages, which apply to those selling goods, within the scope of the non-discrimination requirement in Clause 5(1). This means that equality legislation regarding employment conditions introduced in Northern Ireland in order to comply with the non-diminution requirement in Article 2 of the protocol must be protected.

If there is a challenge to such employment legislation, it is not clear that the legislation can be defended on the grounds that it can, as set out in Clause 8 of the Bill,

“reasonably be considered a necessary means of achieving a legitimate aim.”

Clause 8 defines what constitutes a legitimate aim. This appears to be an exhaustive list and does not include, for example, compliance with an international treaty as a legitimate aim. To illustrate the potential impact of the Bill on the Article 2 obligation, I will set out an example of additional requirements on employers in Northern Ireland that could be introduced as a result of changes to the Annexe 1 directives that deal with the wide panoply of equality directives that could be challenged under the Bill. It is not possible to predict the exact nature and extent of future EU changes to the Annexe 1 equality directives, including new obligations on employers.

However, taking into consideration EU equality law changes already made, recent European Commission proposals and plausible future scenarios, there is a reasonable prospect that over time, the Annexe 1 directives dealing with all equality matters may be updated, amended or replaced, and additional EU requirements on employers introduced. Employers in Great Britain may consider that these changes negatively impact on their businesses and influence an employer’s decision to employ staff in Northern Ireland, and thus to provide goods in Northern Ireland, and would therefore be challengeable as indirectly discriminatory under the Bill. The equal pay example can be characterised with the EU amending or replacing the existing equal treatment directive to incorporate extended equal pay obligations on employers.

As a result of these additional requirements, an employer in Great Britain with a predominantly female workforce could decide not to employ staff in Northern Ireland and could consider that there is more limited market access in Northern Ireland than in Great Britain. Using the indirect discrimination prohibition in the Bill, the employer could challenge legislation enacted by the Northern Ireland Assembly to comply with these new obligations. Other examples could be given relating to disability discrimination, race equality, equal pay audits and gender pay reporting.

To comply with Article 2 of the protocol, there is a need to ensure that any such additional requirements on employers in Northern Ireland, introduced to keep Northern Ireland equality law aligned with future EU changes to the equality directives in Annexe 1, cannot be challenged as indirectly discriminatory under the Bill. I therefore urge the Government to accept this amendment and ask the Minister to accept a letter from me, on behalf of the Northern Ireland Human Rights Commission and the Equality Commission, which will outline in depth their main concerns about this issue. Will he meet with us and the other signatories to the amendment to discuss these issues? I honestly believe that the amendment would provide legal clarity and certainty, including for employers who have responsibility under Article 2 of the protocol.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, I am delighted to speak in support of Amendment 6, moved so well by the indefatigable noble Baroness, Lady McIntosh, who has done such a good job in moving amendments in Committee and on Report. I endorse the tribute that she gave earlier to the equally indefatigable Michael Clancy of the Law Society of Scotland, who has helped us draft these amendments and examine the Bill in detail. It must be a greatly satisfying reward for his hard work to see some of his suggestions incorporated into legislation. I am sure we all endorse the thanks to him.

I underline one point made by the noble Baroness, Lady McIntosh. The amendment emphasises that the lack of effect relates only to the discriminatory element of the statutory requirement and does not otherwise affect its validity. I hope the Minister will therefore feel able to accept the amendment. I am sure he would not want to encourage discrimination in any form.

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[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

I have just received a message that the noble Baroness, Lady Ritchie, would like to speak briefly.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I would like to ask the Minister a further question. In my submission, and the submission of the noble Baroness, Lady Suttie, we specifically asked the Minister for a meeting for the Northern Ireland Human Rights Commission and the Equality Commission, along with the signatories of Amendment 24, to further discuss the outworkings of Clauses 5 and 6 and Clause 11, and also the complex nature of our amendment and the problems that could ensue as a result of the outworkings. I would greatly appreciate it if the Minister could accede to our request.

[Lord Callanan (Con)]

The noble Baroness also asked me if I would receive a letter, and I said that I would do so. That is probably the best course of action. If she writes to me with her concerns, we will, of course, look at it. I am not sure that I am the right Minister for any such meeting to take place. I am a Minister in BEIS, which is responsible for this Bill, but many of its aspects are, of course, being handled by other government departments. I will certainly seek to put her in touch with the correct and relevant officials and Ministers.