United Kingdom Internal Market Bill

Caroline Lucas Excerpts

Tuesday 22nd September 2020 Commons Chamber

[Mr Holden]

No, I have already given way to the hon. Lady once on this point.

More broadly, it is crucial that as we leave the European Union we give as much confidence as possible to British business, especially at this time of covid-19. There is a lot of uncertainty at the moment in my constituency—and I am sure in the constituencies of other hon. Members—particularly relating to the covid pandemic, and anything we can do to provide assurance on our important ongoing internal market relationships will be crucial. That is why I shall be supporting the Government and opposing the amendments proposed by the Opposition.

[Caroline Lucas (Brighton, Pavilion) (Green)]

It is a pleasure to serve under your chairship, Dame Rosie. I reiterate my support for amendment 9, which would very effectively put powers back where they belong with the devolved nations.

I turn to my new clause 10 on environmental standards, an issue that has been raised by several hon. Members on the Opposition Benches. I want to start by reminding hon. Members of two Government commitments. The first was in the Business Secretary’s foreword to the UK Internal Market Bill White Paper, which stated that its proposals would

“prevent any part of the UK from blocking products or services from another part while protecting devolved powers to innovate”.

The second was when the Bill was published and the Government website sought to assure us:

“The UK’s existing high standards across areas including environmental standards, workers’ rights, animal welfare and food standards will underpin the functioning of the Internal Market”.

I have tabled new clause 10 because the Bill does not give legislative effect to either of those commitments, and fails to create the proper framework and give the safeguards and assurances needed to ensure that all four nations of the UK will be able to legislate ambitiously, progressively and, indeed, effectively to protect the environment.

As it stands, the Bill allows market access principles to trump the environment, risking, as others have said, a race to the bottom and stagnant, if not actually diminishing, environmental standards. To date, the UK Government and the devolved Administrations have been aligned behind a common baseline of minimum EU standards, and that baseline has been kept high in part by the requirement for environmental measures to aim at a high level of protection. EU law has also provided—crucially, in certain circumstances—scope to go beyond the baseline to protect the environment and human health.

Regulatory divergence already exists in the UK, and there have been several examples from the devolved Administrations of innovative policies that deliver legitimate public policy objectives and, specifically, progressive environmental rules and regulations. I am thinking, for example, of the fact that Wales was the first country in the UK to introduce a charge on carrier bags. I have tabled this new clause because I believe the measures set out in the Bill could affect the ability of all Administrations within the UK to achieve their environmental ambitions and, indeed, to keep improving environmental standards. It could, in other words, lead to a race to the bottom in the absence of commonly agreed minimum standards.

Under the current Bill, while the devolved Administrations are not legally prohibited from introducing new requirements for goods and services, under the market access commitment, these new requirements will be disapplied for incoming goods if standards remain lower elsewhere. That risks rendering such measures ineffective in practice, creating a chilling impact on their creation in the first place. The mutual recognition principle means that the lowest standards legislated for by any of the UK Parliaments must automatically be adopted by all, and that will disincentivise individual Governments from improving existing standards and implementing new higher standards.

The Bill sets out no possibility of exception to mutual recognition requirements for environmental purposes. Mutual recognition can be denied only to prevent the spread of pests, disease and unsafe foodstuffs, and even then only under extremely strictly controlled conditions. The broad scope of the mutual recognition and non-discrimination duties and the lack of grounds to justify local requirements will stifle policy innovation in the devolved Administrations, as well as more routine improvements.

My new clause provides for a wider system of derogations, allowing an individual jurisdiction to refuse mutual recognition on the justification of legitimate public policy objectives and, specifically, on the grounds of measures to protect the environment. This is needed to begin more properly to address the need to improve environmental standards to deal with the climate crisis and nature’s stark decline. It is also needed to support and respect the devolution settlements by ensuring that measures taken by the devolved Governments in areas within their competence will not be undermined by this Bill.

It might be helpful to give a few examples of the difference that this new clause makes. First, on the blight of single-use plastic items, the Welsh Government are proposing to introduce a ban on the sale of nine single-use plastic items, while the UK Government are proposing to ban only three. The mutual recognition principle would mean that the Welsh Government would not, in effect, be able properly to regulate the sale of the additional six products if they were manufactured elsewhere in the UK. Producers in England would be able to sell the six products in Wales, irrespective of the higher Welsh environmental standards. As the Welsh Government have stated, a ban that could apply only to Welsh-produced plastics would undermine the policy and render it ineffective.

Secondly, as this Bill stands, the rules governing packaging would also be classified as a product requirement, and would therefore be fully subject to the principle of mutual recognition. Therefore, imported goods would not have to comply with any new devolved requirements. As Professor Dougan from the University of Liverpool has said—others have already quoted him today—the basic effect of the UK internal market

“would be a powerful disincentive for Scotland to exercise a devolved competence to regulate packaging on environmental grounds, since any new rules would end up applying only to domestic goods, not English imports.”

Finally, a third example is a Department for Environment, Food and Rural Affairs initiative that, without new clause 10, could be negatively impacted by the provisions of this Bill. DEFRA has plans to phase out sales of house coal and wet wood in England. However, if this Bill comes into force before those bans, they will be less effective, since the sale of materials originating from other parts of the UK would not be banned. For example, pre-packaged domestic coal originating in Wales, Scotland or Northern Ireland could be sold in England because the ban will be disapplied in relation to its sale. There will be no possibility of an exception or defence of proportionality, because the Bill does not provide for one.

My new clause 10 would address the Bill’s failure to include the exceptions and derogations vital to enabling all four UK nations to put in place sensible and proportionate measures to protect the environment. It deals with the practical consequences of mutual recognition by requiring suppliers to comply with devolved rules where they relate to the pursuit of environmental protection. The condition under paragraph (b)—that any regulation to which this amendment applies must be a proportionate means of achieving a legitimate aim—will help to ensure that derogation on the grounds of environmental protection cannot be exploited for other policy or market aims.