United Kingdom Internal Market Bill

Baroness Ritchie of Downpatrick Excerpts

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

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

My Lords, I apologise for the fact that I am having to appear electronically, rather than be there in person, for logistical reasons. I am sorry not to be able to engage in a bit of banter with the noble Lord, Lord Cormack, for example, and in particular with the Minister, the noble Lord, Lord Callanan, with whom I have had a few exchanges of interest in the past. Nevertheless, I am very happy to speak today in support of the amendments in the name of the noble Baroness, Lady McIntosh, and myself.

These amendments would require—the important word—the UK Government to consult with the devolved Administrations in the areas described. Thankfully, the Government seem to be moving in that direction, as we see from Amendment 14. For once, I thank the noble Lord, Lord Callanan, for accepting that. In Amendment 15, my noble friend Lady Hayter on the Opposition Front Bench, and others, add a requirement to seek approval from the devolved Administrations while allowing the UK Government to go ahead if that is not obtained within a month. I will support that amendment if there is a Division on it, because it puts extra pressure on the Government to find agreements. There is in fact no difference in principle between the amendments, but they underline the need for some greater understanding of the nature and the extent of devolution. However, I repeat what others, including the noble Baroness, Lady Finlay, said, that we would prefer that the Bill had not seen the light of day and hope the Government and the Commons might think again in the light of their overwhelming defeat here in the Lords.

Meanwhile, we need to consider how these matters are dealt with if the Government do not take our advice and press ahead with the Bill. Some in Scotland, principally the SNP, have described the transfer of responsibilities from the European Union as a “Westminster power grab”. while the UK Government see it as a “power surge” to the devolved Administrations. The fact is that neither is the reality or correct. In truth, we were all willing to see common standards for the whole of the UK decided as part of the European Union common market, with some reservations as appropriate. Now we need to determine how we deal with all these powers in what will effectively be a UK common market.

There is however a constitutional difference between the European Union and the United Kingdom. Whereas the European Union is a federation of sovereign states, as we know, the UK has been a unitary state for centuries but has rightly decided to devolve some powers to three of its constituent parts over the past two decades. I support that and agreed with it, but we are still coming to terms with the new reality, and it is proving more difficult for some than for others.

In areas where there has been devolution of powers, those transferred from the European Union should of course go to the devolved Administrations as long as it can be done without any real distortion of the United Kingdom’s internal market operation. In our amendments, there is provision for them to be consulted, but not, of course, to have a veto, which I believe to be correct. However, there needs to be genuine consultation and, sadly, as my noble friend Lord Hain said, that has not been the case with the current UK Government, who have fuelled resentment and nationalist movements in the three nations.

Finally, I hope that the Minister will spell out in greater detail in his reply the procedures by which the Government intend to consult—the arrangements for consultation; secondly, how they will take account of those consultations within Westminster and Whitehall; and, finally, confirm that they will publish reasons if they are unwilling to accept the views of the devolved Administrations. That is the least that the devolved Administrations can expect, and I hope it will not be too difficult for the UK Government to do so.

I look forward to the rest of the debate and hope that when we get to Amendment 15, if there is a Division, the House of Lords will once again show its good sense.

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

My Lords, first, I thank the Minister for his statement at the beginning of this group, in which he indicated that he had made an error in winding-up last week on Amendment 24, which was in my name and those of the noble Lord, Lord Hain, and the noble Baronesses, Lady Suttie and Lady Bennett of Manor Castle.

I have listened to what the Minister said today. I wrote to him at the weekend about what was said on broadcast TV, which I quote:

“If the employment law requirement were to meet that test, they would not be disapplied because they had discriminatory effect.”


When the Official Report appeared, it stated:

“If the employment law requirement were to meet that test, they would not be disapplied unless they had discriminatory effects.”


The difference between “because” and “unless” leads to direct opposites, and that requires further clarification from the Minister and from the Minister who will hold the meeting. I thank him for indicating that he will facilitate that meeting with the members of both the Human Rights Commission and the Equality Commission in Northern Ireland on this issue.

As the noble Baroness, Lady Hayter of Kentish Town, stated, if we are not satisfied with the outcome of that meeting—it is important that it takes place prior to Third Reading—I would seek to bring that issue back then. For the purposes of clarification, I think I need to point out that the withdrawal Act 2020 implemented Articles 2 and 13 faithfully. Clauses 5, 6 and 8 of the Bill threaten that implementation by allowing changes to legislation implementing the obligation to keep Northern Ireland in line with equality law in future. It does this by providing that such legislation cannot be challenged on the basis that it is indirectly discriminatory. Until last week, the Government had said that Clauses 5, 6 and 8 did not apply to such legislation. The Minister’s statement today makes it clear that they will apply and may be used to challenge legislation implementing the Article 13 obligation.

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[Baroness McIntosh of Pickering (Con)]

My Lords, I speak briefly on both these amendments. I have a lot of sympathy with what the noble Baroness, Lady Boycott, and co-signatories are pushing in Amendment 23. I presume that, in responding, the Minister will say that the Government are putting forward an economic Bill to create an internal market to compensate for us leaving the internal market of which we have been a member for 46 years.

Amendment 23, like Amendment 21, does not have regard to the one remaining part of the original Article 36 of the Treaty on the Functioning of the European Union that has been left out of Amendment 21. I gather this was an oversight that will be corrected at Third Reading. In my view, the fatal flaw is that any reference to public safety or security has been left out. It is interesting to note that environmental standards and protection of the environment—which, I would say, includes climate change—and many of the other issues in Amendments 21 and 23 are dealt with elsewhere. It is bizarre to leave out any reference to public safety and security when we are in the middle of a pandemic, which is why I could not vote for Amendment 21 at this stage.

I am full of praise for the noble Lord, Lord Wigley, for bringing forward Amendment 22. I presume that the Minister, in responding, will say that it is not this Bill but the Trade Bill that will prevent the Welsh Government or Yorkshire councils from seeking to favour their own produce in public procurement. I am particularly mindful of the work that Deliciouslyorkshire does. Obviously, all food in Yorkshire is delicious, but Deliciouslyorkshire is a marketing organisation that promotes foods made in Yorkshire.

I was very enthusiastic about one of the potential benefits, if there were to be any, of leaving the European Union in that we would be able to source more of our foods locally. Now I understand that, in the global procurement agreement in the Trade Bill, we will have to meet exactly the same threshold as we were required to meet in the European Union public procurement policies and tenders for bids. Am I right, or is the noble Lord, Lord Wigley, right? Will there be opportunities for the Welsh Government and Yorkshire councils to promote and source more of their own foods in, for example, local hospitals, prisons and schools than would otherwise have been the case?

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

My Lords, I support Amendments 22 and 23, but I shall refer in particular to Amendment 22 in the names of the noble Lords, Lord Wigley and Lord Hain. Again, this is about ensuring that no straitjacket or limit is placed on the procurement practices of devolved Administrations. It is about protecting their functions, with particular reference to the market access principles, which should not override devolution settlements. The noble Lords, Lord Hain and Lord Empey, referred to the situation of Northern Ireland which, in terms of goods for procurement purposes, will be subject to the Northern Ireland protocol and, therefore, the EU.

While I believe there is a need to ensure that there are no borders anywhere, whether in the Irish Sea or on the island of Ireland, notwithstanding that, there are areas of clarification required. Can the Minister say, or perhaps write to us on it at a later stage, whether any procurement practices would apply to the devolved Administration in Northern Ireland which would be subject to UK oversight as per the Bill? Will there be any at all?

Secondly, on the previous group I asked the Minister whether he could provide an update on the interparliamentary Brexit forum, which consisted of representatives of the devolved Administrations and the UK Government. It has not met since September 2019. Maybe he could provide us with an update on when its next meeting is likely to take place.

Further to the point made by the noble Lord, Lord Empey, I am reminded of those made by the UK constitution monitoring group. It said that government Ministers have occasionally asserted that the United Kingdom Internal Market Bill is not a constitutional measure at all but is concerned only with economic policy. It would therefore perhaps be better to characterise it as a key building-block in an emerging economic constitution for the UK, post Brexit. However that may be, the group believes that the Bill raises fundamental questions about the governance of the UK following withdrawal from the European Union, in particular whether it will be possible to establish a common understanding of the future role and importance of the devolved institutions in UK governance. Would the Minister like to comment on that statement in his wind-up, and will he assure the House that market access principles will not be used to override the devolution settlement?

[Lord Liddle (Lab)]

My Lords, I will speak briefly in favour of both these amendments, particularly Amendment 22 on the question of public procurement. When I was Europe adviser in Downing Street, I formed a view that the British authorities—in Whitehall and the Government Legal Service—took a more legalistic approach to implementing the state aid rules, the non-discrimination rules and so on of the European single market than did most other member states. It was quite an effort to get the system to think differently about these questions.

One of the most notable achievements where we thought differently was towards the end of the Labour Government, when my noble friend Lord Adonis, who is not in his place, insisted that the award of a big contract for railway carriages and new trains would go to Hitachi but on condition that it built a plant to construct them in Shildon, County Durham. That was a success in breaking the established orthodoxies; it came rather late in the day, but there we are. Then when my noble friend Lord Mandelson was trying to bring back the concept of industrial policy, also towards the end of the Labour Government, one of the big questions was that of public procurement. I really am not a protectionist; I believe in open markets and that, on the whole, the benefits of free trade are very considerable. But there are circumstances in which public procurement can be used to support local business in a way that is justified.

One of the ways of doing this, of course, is that if you have innovative local firms with a lot of potential to grow, they can easily be squeezed out of the market by competition from big companies which can produce at much cheaper prices. I believe that one reason why we have not been as innovative as we should is that we have not used public procurement to support small and medium-sized enterprises with great potential for growth. This was one of the things we were trying to do towards the end of the Labour Government.

However, I also believe that that kind of policy is difficult to run from London. That makes this kind of public intervention, which is about not spending subsidies on lame ducks but trying to grow the economic potential of a local area, one that is best decided upon as close as possible to that area. That is why it is a terrible mistake to try to limit the powers of the Welsh and Scots on these matters. In fact, I would like to see proper devolution in England so that English authorities could do this outside London. This amendment has my wholehearted support, and I hope that the Government will give it a very considered response.