United Kingdom Internal Market Bill

Drew Hendry Excerpts

Tuesday 15th September 2020 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I beg to move amendment 28, page 20, line 31, leave out “, Scotland”.

This amendment would exempt from the operation of Part 4 (independent advice on and monitoring of UK internal market) regulatory provisions applying in Scotland which did not apply to the whole of the UK.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Clause 28 stand part.

Amendment 29, in clause 29, page 21, line 3, at the beginning insert

“Following legislative approval from all devolved administrations,”.

This amendment would ensure that the CMA may only undertake a review following legislative approval from all devolved administrations.

Clauses 29 to 34 stand part.

Amendment 21, in clause 35, page 26, line 16, at end insert—

“(1A) Prior to publishing the information in subsection (1) the CMA must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland about how it is to approach the exercise of its functions.”

The intention of this amendment is to ensure that the devolved administrations are consulted before the CMA determines how to exercise its functions in regard to the UK Internal Market.

Clauses 35 to 37 stand part.

Amendment 30, in clause 38, page 29, line 22, after “must” insert

“obtain the agreement of the devolved administrations and”.

This amendment would ensure that the Secretary of State cannot decide amount for penalties with CMA without agreement from devolved administrations.

Clauses 38 and 39 stand part.

New clause 1—Dispute resolution mechanism—

“(1) Within the period of two months after the day on which this Act is passed, the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland about how any disputes relating to the functioning of the internal market will be resolved between the four parts of the United Kingdom.

(2) Within the period of three months after the day on which this Act is passed, the Secretary of State must lay before each House of Parliament a report detailing how any disputes relating to the functioning of the internal market will be resolved between the four parts of the United Kingdom.

(3) Any dispute resolution mechanism established by the Secretary of State must provide for representation from each nation of the United Kingdom.”

The intention of this clause is to help resolve the functioning of the internal market between the four nations of the United Kingdom.

New clause 2—Limits on powers to override common frameworks—

“The Secretary of State shall not make any order or regulations under this or any other Act of Parliament that has the effect of imposing lower standards on Scotland, Wales or Northern Ireland, in any area for which a common framework—

(a) has been agreed,

(b) is in development, or

(c) becomes necessary,

unless, where subsection (b) or (c) above applies, the Secretary of State judges that a reasonable period has passed and the negotiations have failed to reach agreement, and a draft of the order or regulations has been laid before and approved by resolution of each House of Parliament.”

This new clause puts common frameworks on a statutory footing. Where there is a common framework agreed, Ministers would not be able to override them through secondary legislation to impose lower standards on devolved nations. Where a common framework was in development, or a new common framework became necessary, Ministers could not impose standards until the negotiation of common frameworks had taken place between the nations of the UK and failed to reach agreement after a reasonable period. The UK Parliament would be the ultimate arbiter of standards if reasonable agreement could not be reached.

New clause 3—Duty to consult, monitor and report—

“The CMA has a duty to consult with all relevant national authorities and shall produce monitoring reports on

(a) changes in standards, and

(b) assessments of whether standards have been met.”

New clause 4—Appointment of members to the Competition and Markets Authority board by the devolved administrations—

“(1) Schedule 4 of the Enterprise and Regulatory Reform Act 2013 is amended as follows.

(2) After sub-paragraph 1(1) insert—

‘(1A) The members appointed under sub-paragraph (1)(b) must include—

(a) a member appointed by the Scottish Ministers,

(b) a member appointed by the Welsh Ministers, and

(c) a member appointed by the ministers of the Northern Ireland Executive.’”

This new clause gives the devolved administrations the power to each appoint a member to the board of the Competition and Markets Authority.

[Drew Hendry]

Dame Rosie, it is a pleasure to serve under your chairmanship. I rise to talk to amendments 28 to 30 in my name and those of my right hon. and hon. Friends.

When the Institute for Government warned that

“it is not clear how disputes around the functioning of the internal market will be managed”,

it opened up the yawning and damning gap in the plans for the governance of the internal market. As a result of ditching co-operation over common frameworks, this Government propose to fill the gap with an Office for the Internal Market—an unelected quango. I will return to the composition of that body shortly. The Office for the Internal Market will have an effective veto over the Scottish Parliament, and the subsequent result is that devolution will be hamstrung. This is yet another step in introducing a system where standards are set by Westminster and they must be accepted by Scotland in devolved areas.

Analysis by the Scottish Government has revealed that successful Scottish policies such as alcohol minimum unit pricing, our policy on tuition fees and the ban on smoking in public places would be among the Bills referred to the Office for the Internal Market. That has been opposed by many bodies who have shone a light on this. The National Farmers Union Scotland has raised a series of concerns about the function of the Office for the Internal Market’s dispute resolution mechanism in managing policy differences, ensuring that the UK Government do not have the final say on areas of devolved policy, including agriculture, and enabling the devolved Administrations to act where it is considered that a policy aligning in a particular manner is unfavourable to devolved interests such as agriculture.

Of course, it would not have to worry about that if the UK Government had simply continued work on common frameworks. Common frameworks are designed to manage cross-UK divergence where EU law and devolved competencies intersect, including in relation to the functioning of the UK domestic market, together with existing processes for regulatory impact assessment and existing structures for regulatory co-operation and information sharing. Let us be clear: they do not need to be supplemented or undermined by a new, unelected body.

[Patrick Grady (Glasgow North) (SNP)]

Does this not get to the crunch? Government Members keep asking what powers are being taken away from the Scottish Parliament. My hon. Friend is outlining it—the power that is being taken away is the power to make all these decisions. The Scottish Parliament is going to be trumped by an unelected, unrepresentative body, instead of having agreements between the devolved Governments and the UK Government on the framework basis, which should be being implemented.

[Drew Hendry]

I could not agree more. This simply does not have to happen. Scotland does not need it, and Scotland does not want it.

[The Parliamentary Under-Secretary of State for Scotland (David Duguid)]

So you say.

[Drew Hendry]

Yes, I am saying that, but that is also what the National Farmers Union is saying. It is also what the Institute for Government has pointed out. A number of other bodies have pointed out that this is just not necessary. We have something that we could work with, with co-operation, but of course, the UK Government do not want co-operation, consultation and working together. They just want to impose their will, and that is what they are trying to do again.

This Bill not only undermines the basic foundations of devolution but goes further, hitting all existing mechanisms for co-operation and the development of common frameworks. It is not this abomination that is required; it is the establishment of the common frameworks mutually agreed, developed and implemented through consent, with effective governance and processes for regulatory impact.

[Paul Bristow (Peterborough) (Con)]

The hon. Gentleman called the Office for the Internal Market an unelected quango. Does he accept that, if he had his way, he would be handing powers back to unelected quangos in Brussels?

[Drew Hendry]

This is the argument that Government Members try to propagate all the time—that if these powers came to Scotland, they would immediately be transferred to unelected people in the EU. Two things are wrong with that. First, nobody in the EU is actually unelected when they make decisions; they are all elected by either the Parliament or the people who go there. The second and most fundamental point is that, under these proposals, the UK Government are simply taking all control and overriding the ability of Members of the Scottish Parliament to do their job by representing the people who voted for them and their choices.

[Richard Fuller (North East Bedfordshire) (Con)]

rose—

[Drew Hendry]

I will make some progress.

The UK Government say that they want to

“guarantee the continued right of all UK companies to trade unhindered in every part of the UK.”

Under this proposal, businesses simply have to have deep enough pockets to challenge the democratic decisions of the Scottish Parliament and the Members elected by the people of Scotland to represent and make decisions further for them. For some, it will be “Sale of the Century” or “Bargain Hunt” as they go looking for these things. For those who set their sights on Scottish domestic choices, it does not stretch the imagination much to picture private health companies or private water companies operating in England looking at our publicly owned organisations and seeking to claim that, under the UK Government’s auspices, they have a guaranteed right to trade in Scotland. That is the first big flashing red light here.

[Alison Thewliss (Glasgow Central) (SNP)]

I agree with the points that my hon. Friend is making. Is he as concerned as I am to find that when the CMA arbitrates on a dispute, it does not have to publish the report of its finding, on the basis that such a report contains

“commercial information whose disclosure the CMA thinks might significantly harm the legitimate business interests”

of any person? That means that the CMA could well cover up the report of any dispute in favour of private business.

[Drew Hendry]

Exactly; my hon. Friend makes a telling point. To say that the protections are opaque would be an exaggeration, because they are nowhere near as good as that.

[Richard Fuller]

I am keen, as I mentioned yesterday, to learn more about some of the points of view that the hon. Gentleman is expressing. In the absence of a common frameworks agreement, if it were not possible to get reconciliation between the constituent nations of the country on what the regulations should be, what would be the implications for business?

[Drew Hendry]

The problem with that question is that there is already, as I mentioned at the start of my remarks, a process for dealing with that—the common frameworks. I am saying that the UK Government do not have to take this hammer and smash devolution in order to organise things so that business can co-operate and work across the different nations of the UK, taking cognisance of the choices made by those nations’ individual Parliaments.

I turn to the composition of the Office for the Internal Market, and I would be grateful if the Minister intervened and gave me some answers to these questions. Who are these people? Who will sit down in judgment over the democratically made decisions of the Scottish Parliament? Do we know yet? Do we have any idea? These words from the Prime Minister—he was talking about the EU, of course—are coming back on him, as so many of his outpourings do:

“They may decide that now is the time—even though electorates are already feeling alienated from the political process—to hand sensitive decisions…to unelected bureaucrats.”

But that is what he has decided to do. He has decided to hand these decisions to unelected bureaucrats.

What grace-and-favour appointments will there be to this body? Will any of them have links to the many vested interests that apparently find it so easy to pick up contracts from this Government? The fact that that is something we can only guess at underlines how dangerous this proposal is for Scottish people and communities. We reject the idea of this body of unelected, unknown bureaucrats having power over the Scottish Parliament and the Scottish people.

The SNP has tabled amendments 28, 29 and 30, which are in my name and those of my hon. Friends. Amendment 28 would exempt from the operation of part 4, which deals with independent advice on and monitoring of the UK market, regulatory provisions applying in Scotland that did not apply to the whole of the UK. Via this amendment, the SNP wants Scotland to be removed from part 4 of the Bill, because it undermines devolution.

Decisions made by our elected representatives must be upheld, and this proposal to overrule the Scottish Parliament is a democratic outrage. Let us be clear that we cannot and will not accept this legislation in any form. Under the unelected Dominic Cummings, the Prime Minister is forcing this power grab through, despite overwhelming opposition from Scotland’s Parliament and MPs. It proves that Scotland will never, ever be accepted as an equal partner in the UK. It attacks the foundations of devolution and gives Westminster and an unelected quango a free hand to overrule the Scottish Parliament in devolved areas, threatening our NHS, our food and our environmental standards. It fires the starting pistol on a race to the bottom.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I fully agree with amendment 28, which is very well drafted. The same should apply to Wales and Northern Ireland, because it would allay any fears in the respective devolved countries of the UK that the British Government are using the UK Internal Market Bill to torpedo devolution.

[Drew Hendry]

Indeed, and this is a matter that does not just affect Scotland, as the hon. Gentleman said. Even the Labour-run Welsh Government have come out to stand against these measures.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The hon. Gentleman has made some strong points, but does he agree that it does not have to be this way? He will know that our Counsel General, Jeremy Miles, has been giving evidence alongside one of the Scottish Ministers this morning to a Committee in this place. He spoke of the engagement and discussion they had had with the previous Prime Minister, the right hon. Member for Maidenhead (Mrs May), and how that completely dried up at the start of this year, so much so that they did not even get the details of the Bill until the night before it was published.

[Drew Hendry]

That sort of attitude towards what should be co-operation over our common interest underlines the contempt that has been shown for the devolved nations. It is yet another example.

As I have said, we cannot and will not accept this legislation in any form. All the Bill does is simply and plainly underline why the democratic choices that represent Scottish people and the protection of our Parliament can only be delivered through the powers of independence for Scotland, so that it can take its place as an independent nation among the other independent nations of the world.

[Sir William Cash (Stone) (Con)]

The arguments that I have just heard from the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) are, in my judgment, completely unjustified. [Interruption.] He might expect me to say that; it is hardly surprising. The reality is that the Bill is intended to provide for independent advice and monitoring through the creation of this internal market within the Competition and Markets Authority arrangements. What the provision clearly states—far from it being just a bunch of nodding donkeys, which is more or less what the hon. Gentleman is saying—is that it will be a non-ministerial department, albeit sponsored by the Department for Business, Energy and Industrial Strategy, and it will have an enormous amount and range of experience and knowledge brought from its predecessor.

[Drew Hendry]

I am grateful to the hon. Gentleman for giving way, especially as I just recently concluded my remarks, but can he confirm two things for me? Who will be on the body, and who has—he will know the answer to this—the final say over this body?

[Sir William Cash]

What I can say for sure is that it will not be the European Union, and that summarises the argument in a nutshell. It is something I spoke about in the debate only yesterday, where I made it entirely clear that there is one thing we have to be absolutely clear about, and this Government, as compared with the previous Administration, have made it clear. In relation to that vast range of state aids that I mentioned yesterday—they are effectively decided by the European Commission and imposed on our own companies and our own internal economic sovereignty at the moment, but we are now going to insist on retrieving them, and we have retrieved them by leaving the European Union—the position is simply this: the manner in which the European Court and the European Commission operate needs to be revised, reviewed and abandoned for the purposes of ensuring that in the United Kingdom, we have a competition policy that enables us to be able to compete fairly, not only throughout the whole world, but also in relation to the European Union.

It is well known that the question of state aids, which goes across such a wide range of matters, as I mentioned yesterday, causes an enormous amount of problems in many sectors of the British economy. We have to be able to compete effectively. We have just heard a statement on coronavirus. The damage that has come about as a result of this uncontrollable—or virtually uncontrollable—disease, which has infected so many people, affects the operations of our businesses and has created a great deal of economic dislocation. We will need to be able to compete effectively throughout the world. This is a serious matter about a serious issue. What we cannot have, as I mentioned yesterday, is the situation that we have at the moment, which is where authorisations are given by the European Commission that either create discrimination against British businesses or have the perception or the potential for doing so. They will affect the voters in Scotland—and the voters in Sheffield, if I may say so. I was brought up in Sheffield. I saw what the European Coal and Steel Community did to the British steel industry. [Interruption.] I hear what the hon. Member for Sheffield Central (Paul Blomfield) says. The reality is that those businesses were driven out of business by, in many cases, unfair subsidies and unfair state aids that were given to other member states. I can give an example. I happened to know many people who worked at the coalface—I used to play cricket with them when I played for Sheffield—and I can tell Members that the Sheffield steelworkers, whom I also played with on occasion, sometimes it was rugger, found that they were very severely jeopardised by the massive state aids that were given to the German coal industry—it was as much as £4 billion—and authorised by the Commission. For a variety of reasons, we did not get the same kind of treatment here in the United Kingdom. This is all part of the problem of how to have fair and reasonable competition.

--- Later in debate ---

[Richard Fuller (North East Bedfordshire) (Con)]

Thank you very much, Dame Rosie—that was unexpected. It is a great pleasure to serve under your chairmanship, and to have the opportunity to raise some general points and specific questions relating to the clauses under consideration today.

Overall, I am very supportive of the Bill, but, as with any substantial change, caution, checking and prudence should be part of the Government’s process. When I look at regulations and regulatory frameworks—which perhaps I do a little too often—uppermost in my mind is the quality of the regulations or framework, their effectiveness, their relevance, and whether we have the correct allocation of decision authorities given the different parts of the United Kingdom or different groups for which the regulations are being made.

On that last point, I want to pick up on some of the issues that animated the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and perhaps others in their questions about the choice of a common approach compared with a common framework. I should perhaps know more about this area, but it is alluded to in paragraph 8 on page 5 of the explanatory notes to the Bill, which states:

“As part of its vision for the UK internal market, the Government is also engaging in a process to agree a common approach to regulatory alignment with the devolved administrations. The Common Frameworks Programme aims to protect the UK internal market by providing high levels of regulatory coherence in specific policy areas through close collaboration with devolved administrations.”

Where is that in the Bill or today’s considerations? What is the Government’s current thinking around engaging in a process to agree a common approach as part of their vision, as the explanatory notes state?

I did not get an answer from the hon. Member for Inverness, Nairn, Badenoch and Strathspey to my question about how disputes would be resolved in a common frameworks approach, which seems like a fundamental issue.

[Drew Hendry]

I thank the hon. Gentleman for allowing me to make good my deficit in not answering his question fully. I am happy to try to do so now. I understand that before the Bill was introduced, the Joint Ministerial Committee, with Ministers on both sides, was working on a programme, with some success, I understand, by which all these issues could have been ironed out in a collaborative and consultative way with each of the Governments of the devolved nations, but that has now been torn asunder. I look forward to the answer to the question about how this collaboration will work in the future, given that the Bill simply overlays that with an unelected quango and the ability for the BEIS Secretary and this Parliament to make the ultimate decision.

[Richard Fuller]

I think I have the answer—it might not be the one he thinks he is conveying—which is, there is none. There is no answer to how disputes will be resolved because it does not appear that that has actually been achieved.

--- Later in debate ---

[Drew Hendry]

Was it not just this Sunday that a UK Government Minister refused to rule out our having to import and sell chlorinated chicken? The product is chlorinated due to the filth of animals living in the cage among pests.

[Alyn Smith]

Absolutely. We are deeply concerned on behalf of Scotland’s farmers—and, indeed, everybody else’s—that trade deals could see a lowering of standards. Mutual recognition of the UK internal market could undermine the capacity of the different authorities to have those rules.

--- Later in debate ---

[Paul Scully]

That is why I am going through the clauses and amendments at Committee stage to keep the focus on what is so important—what businesses expect us to do. I will not go through all the clauses, for reasons of brevity, but I am happy to follow up with anybody who wants to do that as we go through the rest of the Bill’s stages.

Amendment 30 would require the Secretary of State to obtain the agreement of the devolved Administrations before the Secretary of State specifies the level of financial penalties in secondary legislation in cases of non-compliance with the information-gathering requirements of the CMA. I am happy to reassure the Committee that the Government are committed to not taking any steps to bring the financial penalties into effect by commencing the clause until there is clear and credible evidence that there is a need to do so to enable the CMA to fulfil its internal market functions under the Bill. The amendment would also require the Secretary of State to consult with other relevant persons before making the necessary regulations. I want to confirm that the devolved Administrations would be consulted as other persons the Secretary of State considers appropriate, so they do fit within that.

On new clause 2, we are committed to maintaining high standards across the UK. That is absolutely vital. There are effectively two strands of this debate: first, the devolved Administrations; and secondly, concern—understandable concern—about standards. We have said repeatedly that we are committed to maintaining high standards across the UK, so I am pleased to have the opportunity to set out how we are already working with the devolved Administrations to ensure that this will be done.

I thank the hon. Members for Nottingham East (Nadia Whittome) and for Cynon Valley (Beth Winter) for their passionate remarks in favour of common frameworks and the high standards that we have here in the UK. The new clause, though, seeks to fundamentally alter the nature of the common frameworks programme, the design of which was agreed by the UK Government and devolved Administrations in October 2017 at the Joint Ministerial Committee on EU Negotiations. The principles agreed made it clear that the common frameworks are based on consensus and are designed to establish continuing dialogue between the UK Government and devolved Administrations. This dialogue facilitates policy development in a range of policy areas where powers returning from the EU intersect with devolved competence.

My hon. Friend the Member for North East Bedfordshire rightly asked what underpins those common frameworks. Common frameworks provide an agreed approach to ensuring regulatory coherence across the UK in specific policy areas where powers are returning from the EU and intersect with devolved competence. The Bill, on the other hand, works alongside these common frameworks to provide a broader structural underpinning, and offers additional protections to the status quo of UK trade, ensuring certainty for businesses and investors in the form of a backstop—if I may say that—of regulatory coherence. The UK Government continue to work closely and constructively with the devolved Administrations. It would not be appropriate to create a legislative underpinning for UK common frameworks because this is about consultation, collaboration and working together with the Administrations rather than legislating to push them to do so.

In conclusion, in the debate we have had today, we started off with some misunderstandings about common frameworks—we have five frameworks coming before Christmas, including for food standards. We have talked about whether water and the national health service were at risk in Scotland, both of which are not within the scope of the Bill. This is really important: when one starts reading the Bill, one has to get to the last page, because that is where the schedule of exclusions is. It is important to do that, before we posture here in this House about something. As I say, businesses are crying out, “Do not do the politics. Let us trade across the UK.” That is what they are crying out for. That is what they want. So I hope that the amendments will be not be pressed and then we can get on with getting this Bill through the House.

[Drew Hendry]

Mr Evans, it is a pleasure to serve under your chairmanship. I must admit I am still reeling somewhat from the irony of the Government opposing amendment 29 on the basis of political intrusion.

We have heard today from those who support independence and from those who are diehard Unionists in this Chamber. We have heard the concerns of the Welsh Government. Can I say that it is not a manufactured grievance to have these concerns from the Welsh Government, because they are genuine concerns? But that is true for Scotland, too. These are not manufactured problems; these are real-world problems.

I have to say that the Labour Front-Bench speech was warmly welcomed by those on the Conservative Benches today. The party that brought devolution in—the party of John Smith—undermining devolution in the way it did during that speech deserves some proper reflection.

In this debate, we have heard some warm words, but again, we have had absolutely no detail on how this is actually going to be protecting devolution. It is not. We have had no detail on the Office for the Internal Market. Who is going to be in that unelected body? How can we vouch for the integrity of anybody when we do not know who is going to be on that body and who is going to elect them—or who is going to appoint them, I should say?

The Minister talked about alcohol minimum pricing, which by definition is a discriminatory policy in Scotland. How can that possibly be protected under these measures? It cannot be. If we choose in Scotland and if the Scottish people vote for policies aimed at public health that cause the problem, the Bill still undermines the ability to do that.

The Government are determined to continue with their programme of overriding the Scottish Parliament and its elected representatives, and this underlines the fact that Scotland will never be seen as an equal member of the UK. We do not accept this. The people in Scotland are saying, and it is reported in poll after poll, that the only way to protect our Parliament is to be an independent nation.

Mr Evans, I press our amendment 28.

Question put, That the amendment be made.

The Committee proceeded to a Division.

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Will all non-Front Benchers leave the Chamber behind me, please, and then join the queue in Westminster Hall? Remember to socially distance please as you leave. Thank you very much.