United Kingdom Internal Market Bill

Jonathan Edwards Excerpts

Tuesday 15th September 2020 Commons Chamber

[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.

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[Richard Fuller]

I am very grateful for that clarification.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey also said that the Office for the Internal Market was overlaying that process. That is not correct either. It is an advisory body that informs the decisions made by the common frameworks agreement. Perhaps I did not hear him correctly, but on both those points he did not sound precisely on point.

[Jonathan Edwards]

The hon. Gentleman is highlighting the fundamental weakness of the Bill from our perspective. The internal market is a shared asset between the four countries of the UK, but what is missing from the Bill is clear intergovernmental structures to govern it.

[Richard Fuller]

The hon. Gentleman is absolutely right. “So get on with it”, would be my suggestion to him and his colleagues. I have heard several points of strong opposition to the Bill rather than engagement. A more constructive engagement with the UK Government would help everyone, because as he rightly says the internal market is a shared asset between the four component nations of the UK. So I urge him and his party to encourage that work with the UK Government.

On the specific clauses in the Bill, I have a general point to make. We are very keen as politicians to do the new things, set new regulations, but we spend very little time checking whether they work or whether the regulatory body is doing any good or indeed doing what it said it would do in the first place, so it is important to get a bit more precision from the Government in some of the words they use in the Bill.

Clause 29 talks about the reports—the Minister may be able to help—the Competition and Markets Authority must prepare or report on. Clause 29(5)(b) states:

“developments as to the effectiveness of the operation of that market.”

The word “effectiveness” can have lots of different meanings to lots of different people. What remit are we giving to the Office for the Internal Market on how it will judge the definition of an effective operation of the market? Does it, for example, include whether the operation of the market continues to have the consent of all constituent devolved Administrations of the United Kingdom? Does it mean that the country has an adequate spread of production across the country? Does it mean that each market is promoting competition? Does it mean that prices are going down? The word “effectiveness” covers a lot of issues.

That issue also relates to clause 29(8), which states:

“So far as a report under this section is concerned with the effective operation of the internal market in the United Kingdom, the report may consider (among other things)—…(i) competition, (ii) access to goods and services, (iii) volumes of trade”.

I would say that that is a partial list. There may be other aspects that we would wish the Office for the Internal Market to look into when it considers the operation of the internal market, some of which I have mentioned. For example, is the Minister considering, or would he consider, that that should include the impact of the internal market on consumer rights? Should it include regional disparities? Most importantly, should it include innovation and competition?

Clause 30(3)(a) talks about advising on proposed regulatory provisions on request. This is an important issue relating to the points raised by the hon. Member for Inverness, Nairn, Badenoch and Strathspey, which is not only on the decision authorities but the scope for devolved Administrations to raise issues with the Office for the Internal Market. Clause 30(3) states:

“The condition is that it appears to the requesting authority that—

(a) the regulatory provision to which the proposal relates would fall within the scope of this Part and be within relevant legislative competence, and

(b) the proposal should be further considered in the light of the significance of its potential effects on the operation of the internal market in the United Kingdom.”

It seems to me, particularly in light of the desire of devolved Administrations to have some potential for innovations in regulations such as minimum alcohol pricing, that that “and” might be better considered as an “or”. It would be feasible for devolved Administrations to raise issues which may be outside the scope of their current remit of responsibilities, but for which the devolved Administrations, elected by their local voters, wish to see as a potential regulatory change in the future. What is the harm that could be caused by enabling that to be considered by the Office for the Internal Market?

The hon. Member for North East Fife (Wendy Chamberlain) tabled amendment 21 to clause 35, which relates to participation in the Competition and Markets Authority. Obviously, she may wish to speak to her amendment directly, but I draw the attention of the Minister to the issue of participation in the CMA. It is a relevant question to ask who will be on those bodies. We put the so-called great and the good on such regulators, but we do not really know who they are. What oversight do we have of their performance? What oversight and decision rights do we have of appointments? Would it not be a consideration to spread that beyond this Parliament to include devolved Administrations? I urge my hon. Friend the Minister to look carefully at the amendment tabled by the hon. Lady, as well as her new clause 4.

I welcome the Bill. As the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) mentioned, the internal market is a shared asset and we all want it to work effectively. The Bill is a very good start in making us move in the right direction, but we need some prudence in its implementation. I am very grateful to the Minister of State, Cabinet Office, my hon. Friend the Member for Norwich North (Chloe Smith) for her intervention to clarify some points on where we stand in relation to the common framework.

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[Julie Marson (Hertford and Stortford) (Con)]

It is a pleasure to serve under your chairmanship, Sir Graham

This is a good Bill, and a necessary Bill. It will protect the integrity of the United Kingdom and our internal market as we leave the European Union. In our considerations on part 4, the description we heard earlier of our internal market as a shared asset is very apposite. Part 4 provides an important part of the framework that will allow us to uphold our obligation under the Articles of Union, which state clearly that all parts of the United Kingdom should be on the same footing in respect of trade and navigation and in all treaties with foreign powers. The United Kingdom is built upon a commitment to free trade between our four nations, and prosperity and peace are built on such trade and partnerships. The European Union, for all its faults and all its deviation from its original vision, was founded on that principle and purpose: to preserve peace through trade.

I speak, therefore, in support of an unamended Bill and unamended part 4 in its entirety. Clause 28 to 39 give us an independent advisory office for the internal market under the auspices of the Competition and Markets Authority that will act purely for the benefit of the UK and each of its nations. This replacement of EU legislation will see practical powers brought back to our devolved Parliaments to help regulate the strength and progress of our internal market and ensure a smooth transition for businesses away from the European Union. The Office for the Internal Market will strengthen the internal market’s might and efficient operation and enable real-time and considered advice to the Government to help direct their route forward.

As a one nation Conservative, I believe that global Britain itself begins with one nation—it begins at home between all four parts of the Union—and the Bill will set us up for that mission by reinforcing the United Kingdom and its internal market. We need these provisions to protect, strengthen and monitor the internal market and to make safe the Union and the businesses and jobs within it, and to protect our sovereignty and that of future generations; and we need them to become that outward looking and strong global nation that this Government and I want us to be and which the might of our internal market demands.

The Bill is a demonstration of the UK’s preparedness to manage our markets abroad and at home. It will ensure unfettered trade across the UK and avoid new burdens and barriers being put on us unreasonably. As we begin our recovery from the covid-19 crisis, these two implications of the Bill could not be more important. Businesses in my constituency rely on seamless trade across our four nations and further afield. While the Government can enable growth, they cannot create it. Throughout the crisis, we have relied on frontline heroes, in the NHS, schools, shops, and elsewhere, to get us through, but in this next stage of the recovery, it will be the wealth creators, business people and entrepreneurs who take us forward, but they need a secure, dynamic, investable playing field from which to operate. That is what these clause provide: the framework in which to grow, the springboard from which to flourish, and the rules to operate within.

I will finish by stressing our obligation to uphold the internal market and ensure that our sovereignty as one nation is secured.

[Jonathan Edwards]

Will the hon. Member give way?

[Julie Marson]

No, I will not give way. We have heard so many canards in the Chamber this afternoon, it is beginning to resemble a duck pond, so I will press on to the end.

We have acted in good faith throughout these negotiations and for many of us too many concessions have been made in the name of good politics and friendship, but a reliance on friendship and good faith is not, it seems, assured, so the Government are right to act to provide a safety net. The potential implications of not doing so are too severe to ignore. The easy choice is to hope; the right choice is to prepare, and that is exactly what the provisions in the Bill set out to do.

They will prepare the UK’s internal market for the next stage of our journey and give businesses confidence in, and understanding of, our business and economic ecosystem. By voting for the Bill in its entirety, including these clauses, we are fulfilling our obligations to protect the integrity of our internal market, our United Kingdom. We simply cannot risk the integrity and functionality of the internal market itself. For those reasons, I will be supporting the Government’s clauses and encourage other hon. Members to do the same.

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[Paul Bristow]

I absolutely agree with the businessman in my hon. Friend’s constituency. I think it is the Federation of Small Businesses in Wales that has said that ensuring stability in the UK market is vital. What businesses in Peterborough want to hear is that they can trade freely across these islands. It is an economic argument, not a political argument, which is what many of the amendments tabled by the nationalists are. It seems ridiculous to have to say this, but the vast majority of business-to-business traders in the UK are selling to, and buying from, other businesses within the UK. The Scottish economy and Scottish jobs rely on UK-wide trade. The Welsh economy and the Welsh jobs rely on UK-wide trade. The Northern Irish economy and Northern Ireland jobs rely on UK-wide trade and, of course, the English economy and English jobs rely on UK-wide trade. The Office for the Internal Market is not there to lecture the devolved Administrations. Let me repeat the point that I made earlier: if the SNP had its way, it would hand the powers of the proposed OIM straight back to Brussels.

The nationalists are okay with quangos, just as long as they are European Union quangos and not British quangos. Let us be clear: as my hon. Friend the Member for Rother Valley (Alexander Stafford) said earlier, the Scottish Retail Consortium has said:

“Scottish consumers and our economy as a whole benefit enormously from the UK’s largely unfettered internal single market”.

That is what is at stake. Would amendments 28 and 29 make the Scottish economy or Scottish jobs healthier? They would not, which is why we need to reject them.

The Office for the Internal Market is there to achieve the things I have described; it is not some sort of power grab. It will advise all four Governments of the United Kingdom, including the United Kingdom Government, as equals. As was said earlier, the internal market is a shared asset of all four nations. All four Governments need to be advised equally. If the internal market is a shared asset, we want it to work well.

New clause 4, tabled by the hon. Member for North East Fife (Wendy Chamberlain), would require that Scottish, Welsh and Northern Irish Ministers have a say on who will advise them. I urge Ministers to give that due consideration and listen to those arguments, because if they do, we can avoid some of the politics that surround the argument. It does not matter how many manufactured grievances there are from the Scottish nationalists; we can avoid some of the politics and just get on with it and vote the Bill through unamended.

[Jonathan Edwards]

The hon. Gentleman is making some points on which we might be able to agree. The issue at hand is who sets the rules for the new UK internal market. Does he agree that the four Governments should play an equal role in setting the rules? Or does he believe that it is a matter for Westminster alone? That is the fundamental issue at hand.

[Paul Bristow]

I have heard the arguments, as have Ministers, I am sure. Points have been made about the internal market being a shared asset; having clear input from the devolved Administrations on who is appointed to the Office for the Internal Market would be an inherently good thing. I am sure that Ministers have heard those arguments, and if they have been heard, we can go ahead with the Bill unamended and just get on with it.

The CBI has said that protecting the internal market is essential and, as I said earlier, the Federation of Small Businesses in Wales has said that ensuring stability in the UK market is vital. Let us not mess around with the most successful internal market in the world, which has worked well for centuries; let us reject the amendments and vote for the Bill unamended.

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[Jonathan Edwards]

I agree with the vast majority of new clause 2, but this is the one point that really worries me, because it indicates that Westminster will have supremacy over Wales, Scotland and Northern Ireland. Am I right in interpreting the end of the new clause in that manner? Surely the hon. Lady’s colleagues in Wales will be very concerned about any proposal that means that the Westminster Parliament will have supremacy over the Welsh Parliament.

[Lucy Powell]

This might be where we differ, as I was going to come on to say, because we believe that the ultimate arbiter of the UK internal market would need to be the UK Parliament. Our amendments seek to ensure that negotiations through common frameworks are conducted in good faith and given proper time and that this would need to come back to the UK Parliament in primary legislation, rather than secondary legislation, as is proposed.

Labour supports the need for some kind of independent body to arbitrate the effectiveness of the internal market. However, we want to ensure that this body is fully accountable to the views of England, Northern Ireland, Scotland and Wales and, crucially, has proper teeth to be able to do what it needs to do. New clause 3 would therefore place a legal obligation on the CMA to monitor, to report and, most importantly, to consult with the devolved Administrations when discharging its new and enhanced duties.

I turn to the amendments tabled by the Scottish national party. While I agree with much of what the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, it appears from the amendments that the SNP does not want a functioning internal market; it wants to frustrate one. I am afraid that some of its amendments would, in essence, give a veto to the Scottish Parliament of the internal UK single market. We cannot support that. We believe that the UK Parliament has to be the final arbiter of a functioning internal market because we believe in the UK, and the SNP does not. Its amendments would clog up the process and effectively offer one Parliament a veto.

As MPs, we have a responsibility and a duty to protect the interests of this country. The rule of law and the safety and security of our nation should be paramount. For the Conservative and Unionist party—let us remind ourselves of that name—to propose legislation that breaks the law and threatens the Union by putting rocket boosters under those campaigning for independence is near unthinkable. We hope that Ministers will accept our amendments to strengthen the Bill and to respect devolution as it stands and that they will table amendments at the next stage to strengthen the Bill further, so that we can keep our Union intact, get Brexit done, get the deal that this country was offered and move on.

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[Paul Scully]

I take the hon. Gentleman’s point, but prior to his contribution, other Members did raise the point about how these people were being recruited and for what reasons.

This measure means that each devolved Administration will be fully and equally involved in the oversight of the UK internal market. It minimises the need to seek court action, thus ensuring the continued smooth operation of the UK internal market that businesses crave. The provisions set out in the Bill provide broad oversight on an equal basis for all Administrations. The new Office for the Internal Market will be able to provide non-binding, expert reporting, technical monitoring, regulations and proposals, which will provide robust evidence on the actual or potential impact of regulatory measures, thus ensuring enhanced transparency and accountability for decision making across all the Administrations, including the UK Government acting on behalf of England. It is important that by doing this, the Office for the Internal Market will add an extra economic impact assessment that could otherwise just boil down to a political debate, which would not provide the consistency and coherence that businesses are seeking at this time.

I turn now to the amendments, starting with amendment 28 to clause 28. The clause is important because it defines those regulatory provisions on which the CMA will report and advise. This will ensure certainty and transparency for Administrations, businesses and the general public. Regulatory provisions are in scope if they set requirements for the purposes of mutual recognition and non-discrimination principles in the Bill for the sale of goods and equivalent services, as well as recognition of professional qualifications, and if they apply to one or more nations but not the whole of the UK.

As we have heard, amendment 28 seeks to exclude Scotland from the benefits of the new Office for the Internal Market. It would carve out regulation that applies only in Scotland from the definition of regulatory provisions across this part of the Bill, which basically means that the Scottish Government could not proactively request advice and its regulatory measures could not be included in the regular monitoring of impacts and trends in the UK internal market. If the functions of the new Office for the Internal Market applied asymmetrically, as is suggested, its work would be severely undermined from the outset.

Full UK-wide coverage and relationships with all four Administrations will be vital in gaining and maintaining the confidence of stakeholders, so I strongly question how the office could effectively fulfil the functions given to it by the Bill if it cannot assess impacts across the UK internal market as a whole. Parity is a central principle in how the office for the internal market will conduct its affairs. It will be of service to all four nations of the UK, but in turn it will legitimately expect to consider the impacts of regulatory measures across all four Administrations. The clause empowers the Scottish and Welsh Parliaments, as well as the devolved Administrations.

Equally, the amendment would deny Scottish Government policy makers an important support system for the development of regulation following the transition period. The expertise and analysis of the Office for the Internal Market, offered to all Administrations equally, should not be rejected in this way. Finally and most importantly, since this provision plays a key part in ensuring there are no trade barriers, businesses across the UK would suffer.

To ensure the ongoing smooth operation of the UK internal market, clause 29 will ensure that emerging trends and developments in the market are independently reviewed by the CMA. The CMA has a strong reputation for independence and impartiality, which the Government have striven to preserve in setting out the functions of the office for the internal market. The UK Government have no role in what I have described: the function of the office in reporting to this House, the other place and devolved legislatures, discussing such topics as intra-UK competition, free access to goods and services, and the impact of diverging regulatory conditions in different parts of the UK.

My hon. Friend the Member for North East Bedfordshire (Richard Fuller) raised other areas that the office could look into. It is important to know that the list is not exclusive; there are other areas, and the CMA has a great track record in championing the consumer, so the consumer point he raised is covered.

I said that there was no role for the UK Government in what I have just described. Truly independent scrutiny is crucial if anyone is to have faith in the office’s pronouncements on the health of the UK internal market, especially our business community at a time when those same businesses find themselves stretched thin by the impact of the coronavirus.

[Jonathan Edwards]

If the office for the internal market writes a report that says, for instance, that a regulation passed by the Northern Irish Assembly—if it was functioning—was contrary to the principles of the Bill, would there be legal recourse if a company was affected by that policy?

[Paul Scully]

As I say, the office will put forward non-binding reports to each devolved Parliament, but then there are the existing provisions for working intergovernmentally. We also have the common frameworks arrangement, as has been described, which has already provided good collaboration and co-operation, which I will come back to in a second. Ultimately, yes, the courts are there as a last resort, but if we have the inter- governmental relationships and build on those, as trusted partners, we will not have to resort to that.



The hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey) said that minimum alcohol pricing, procurement, health and tuition fees would be undermined or constrained by the OIM’s functions. That is just not true. None of the clauses set out in part 4 precludes the devolved Administrations from introducing policies in any of those areas. The OIM will not be empowered to bind Administrations or veto regulations. It will only be concerned with assessing the economic impact of regulation, never its merit.

When not acting at the request of an Administration for reporting or advice, the OIN would only ever be concerned with monitoring the health of the UK’s internal market, such as the flow of trade, the impact of regulations on intra-UK competition and investment, or the ready availability of goods and services for all our citizens. The CMA, which the OIM will be established within, already operates at a strict arm’s length from the Government and all devolved Administrations. It has built up a wealth of expertise and experience, and has a global reputation for promoting competition. That is why it is a natural fit. As my hon. Friend the Member for Stone mentioned, the Bill clearly sets out that the OIM would be required to provide access to its reports and advice to all four Administrations on an equal basis, enhancing transparency and accountability.