United Kingdom Internal Market Bill

Lord Callanan Excerpts

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

[Baroness Hayter of Kentish Town (Lab)]

My Lords, as I have said before, the women in the House always get a bit nervous when we talk about Henry VIII. We have only to go outside and see what happened to some of Henry VIII’s women to remind us that we are a bit uncomfortable with him.

The debate has made clear why the amendments in the name of my noble friend Lady Andrews and fellow members of our always brilliant Delegated Powers Committee should be heeded. Indeed, the unanswered question, posed by my noble friend, is why the Government have not removed the powers in Clause 6 in the way that they have now agreed to remove them in Clause 3. Why the inconsistency? What is the difference between them? Our Delegated Powers Committee certainly did not distinguish between the two pillars of the internal market—market access and non-discrimination— so we do not understand why the Government have taken such a different view on those. Without a stunning, innovative answer—the Minister looks as though he may have one, but there was none such in his letter of 12 November to the Delegated Powers Committee—when we come to Amendment 7 a little later, we will throw our weight behind it to remove the sections which, as the noble Lord, Lord Beith, has just set out, give overwhelming power to Ministers. Furthermore, as my noble friend Lady Andrews says, if these are meant to be just backstop powers to correct as yet-unknown deficiencies, then, given that Clause 13 affects all parts of the UK, it should be for Parliament, not Ministers in Westminster, to make any correction, with the full panoply of safeguards that come with primary legislation for input from the two Houses as well as from the devolved legislatures.

It is really not good enough—in a Bill which, after all, they must have known for four years they would need—for the Government at this stage still to be so unsure that they have thought of everything and drafted correctly that they need to accord to themselves these extraordinary powers to amend important parts of what will then be an Act of Parliament. That was never the purpose of secondary legislation. Indeed, as the Minister will know, we feel that it is likely that the proposed use of these ministerial powers is more the result of the Government’s tendency to rely on them rather on than proper primary legislation on a wide variety of measures. Indeed, as the noble Baroness, Lady Meacher, noted, so common has this become that my noble friend Lady Taylor of Bolton wrote on behalf of the Constitution Committee to Mr Rees-Mogg on 9 November suggesting how to diminish the practice, while the noble Lords, Lord Hodgson and Lord Blencathra, from the Secondary Legislation Scrutiny Committee and the Delegated Powers and Regulatory Reform Committee respectively, similarly wrote to Mr Rees-Mogg on 10 November, specifically with concerns about “skeleton bills and skeleton provision”, noting his acknowledgement that delegated powers

“should not be ‘a tool to cover imperfect policy development’”

and reiterating the need for the Government “at all times” to

“fully justify the appropriateness of delegated powers”.

I fail to hear such justification for these particular powers. Therefore, while welcoming the Government’s support for Amendment 2, we will support Amendments 7, 12 and the others in this group.

I am delighted that, because of the acceptance of Amendment 2, my Amendment 4 is pre-empted. For those who do not follow all this, Amendment 4 would have amended subsections (8) to (11), which was a regulation-making power. We were seeking to give the delegated legislatures a say over that. But clearly, as those powers have come out, my Amendment 4 luckily is pre-empted and not needed. However, we will return to similar amendments next week. For the moment, we welcome the moves of the Government on Amendment 2 and, in due course, unless the Minister comes up with a stunning answer in the next few minutes, we will support Amendment 7 in its place.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank everybody who has spoken in the debate so far. Just before we start, let me give my personal support—not a matter for the Government—to the gruesome twosome, the unholy alliance between the noble Lords, Lord Foulkes and Lord Cormack. I hope that we can get back to full and proper debate in this Chamber as quickly as possible. I do not know about other noble Lords, but I quite miss the heckling from the noble Lord, Lord Foulkes; it adds a bit of interest and spice to our debates. I am sure that the noble Baroness, Lady Jones, copes very well with debate in this Chamber, of which she is a noted exponent.

The Government have listened closely to the concerns from colleagues from all sides of the House and outlined in the DPRRC report. I thank your Lordships for the helpful debates that we had, and I hope noble Lords will think that I have responded at least to some of the points that were made. As I set out in my letter to colleagues last week, we listened closely to all your Lordships’ comments and, after further reflection, we are proposing a number of changes in line with many of those comments to how these powers will operate. The amendments will remove powers that are now, on further reflection, considered non-essential and will provide the fullest transparency and accountability in the use of those that remain. We hope that the package of changes proposed will address the concerns that were raised and provide some reassurance that the Government take their responsibilities seriously in administering these powers.

I understand from the comments of the noble Baronesses, Lady Hayter and Lady Andrews, and others that noble Lords intend to divide the House on this issue tonight. I hope that they will consider carefully what we hope will be very welcome steps before voting in a way that will have quite far-reaching consequences for the operation of the UK internal markets. Given that there are no other groupings today and next week on the delegated powers more generally, I hope that noble Lords will allow me to discuss this grouping in a little more detail.

First, the amendment in the name of the noble Baroness, Lady Andrews, will remove the ability of the Secretary of State to amend the list of statutory requirements that are in scope of the mutual recognition principle for goods. While our position remains that the majority of the powers in the Bill are essential, as I said, in this particular case we are now content that the removal of the power will not substantially undermine the operation and flexibility of the internal market system. Therefore, we have removed the power—I have added my name to the amendment from the noble Baroness, Lady Andrews—in combination with further changes on transparency and accountability that we are proposing.

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

My Lords, at a time when the role and, indeed, the very existence of this House is under increasing scrutiny, would the Minister agree that the fact that he has put his name to Amendment 2, and that he and the Government have accepted the spirit of many of the amendments that were moved in Committee, underlines the value of this second Chamber as a revising Chamber and that that is something that should be broadcast widely?

[Lord Callanan (Con)]

I agree with the noble Lord, actually. If you look at the degree of scrutiny with which this House has portrayed this Bill, as opposed to the degree of scrutiny in the other place, you see the value of the debates we have here.

[Baroness Andrews (Lab) [V]]

I am very grateful indeed to everyone who has taken part in this debate, particularly those noble Lords who signed my amendments. It has been a very useful and illuminating debate. I am grateful to the Minister for his detailed responses and, particularly, the information he has provided on the review. Retrospective reviews are always too late to improve or perfect what has happened, but I understand that this is a useful step forward, and I look forward to more detail.

I am afraid I am unable to accept his explanation of the difference between Amendments 2 and 7 in relation to the two clauses. I was struck by the use of the term “non-essential” powers, which was applied to Amendment 2 to Clause 3 and which has enabled the Government to sign the amendment, but made them unable, in the same sense, to apply the same logic to Clause 6.

Very briefly, I will read what the Delegated Powers Committee report actually said about Clause 6, which deals with non-discrimination:

“It suffers from similar defects”


to Clause 5. The report continues:

“The Government say … that the power in Clause 6(5) is necessary to ‘future-proof’ the operation of the non-discrimination principle. They might have said ‘to completely re-write’ the non-discrimination principle.”


We believe that the extreme degree of freedom that these powers give Ministers to go back almost to the drawing board and rewrite their own legislation by way of secondary legislation is so dangerous. Although the Minister has made a case for the distinction, I am afraid it is not one I can accept. Therefore, he will not be surprised when I say that I shall press Amendment 7 to a vote when we reach its place on the Marshalled List.

I say again that I am extremely grateful that the Government have responded so positively to the arguments of the DPRRC, the Constitution Committee and your Lordships, supported Amendment 2 and brought forward these other amendments, as outlined by the Minister this afternoon and in his letter. I beg to move.

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[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the noble Baroness, Lady McIntosh, and my noble friend Lord Foulkes have made the case clearly around the issue raised in Clause 5(3), and I hope the Minister will be able to respond. I join them in thanking the Scottish Law Commission for its considerable work in scrutinising some of the detail of the Bill—as always, it has been very helpful. I put on record our thanks to the noble Baroness, Lady Ritchie, for her very comprehensive and clear explanation of Amendment 24 in her name, and to others who have spoken.

We on this side had the benefit of a presentation by the Equality and Human Rights Commission and the Northern Ireland Human Rights Commission on this point, and I was seized by the fact that this is very important indeed to them and a matter that really has to be dealt with. The ground has been covered very fully and I just want to make sure that it is clear that we support this important amendment. It is designed to ensure that the non-discrimination principle in Clause 5 cannot be used to challenge the statutory provisions introduced in Northern Ireland after the end of the transition period to fulfil the obligation set out in Article 2 of the Northern Ireland protocol. That is relatively easy to say, but it is rather difficult to see how it translates into legislation. I hope that, when he responds, the Minister will be able to give us clarity on this.

As my noble friend Lord Hain said, the stakes here are very high. If you have not been to Northern Ireland, it is sometimes very difficult to get why it is so important to the people there and to the institutions that have to operate within Northern Ireland. There is a very widespread respect for human rights and equalities issues in Northern Ireland; it is something that comes up in conversations wherever you have them, in relation to employment, services, goods and operating in the commercial sector in Northern Ireland. Once you have had that conversation, and once it has been explained to you why it is so important, it is very clear that this is a matter that cannot be left. It is up to the Government to explain now how it is going to happen, and I look forward to hearing from the Minister.

[Lord Callanan (Con)]

My Lords, I thank all noble Lords who have contributed to this debate.

Amendment 6, in the names of my noble friend Lady McIntosh and the noble Lord, Lord Foulkes, seeks to clarify the meaning of Clause 5(3). This subsection explains that

“A relevant requirement … is of no effect in the destination part if, and to the extent that, it directly or indirectly discriminates against the incoming goods.”


This wording was chosen by the Government because it targets discrimination, while leaving intact other elements of a regulation that may be perfectly useful or serviceable. For example, consider the case of one requirement covering two products. One of those products is not discriminated against, but the other faces indirect discrimination due to the particular market structure for that product. Clause 5 ensures that the regulation of the product which is not facing discrimination continues. This would not be the case if the requirement were struck down in its entirety when any part of it is discriminatory.

This amendment gives rise to a risk that a court would read this as attempting to oust its jurisdiction on normal grounds of challenge. That is clearly not the intention of this provision, which is to target the mischief of discrimination without going further or interfering with other legislation. I am sure that it goes without saying that we would not want to invoke any such confusion, nor do I think that that is what my noble friend and the noble Lord are trying to achieve. For these reasons, I hope that my noble friend will feel able to withdraw her amendment.

On Amendment 24, from the noble Baroness, Lady Ritchie, and others, I am very happy to accept a letter from the noble Baroness, and I will ensure that it gets a full reply. The Government are fully committed to Article 2 of the protocol—that goes without saying. We have demonstrated this by making the necessary amendments to the Northern Ireland Act to establish the dedicated mechanism and by working closely with the Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland to operationalise the dedicated mechanism, ready for the end of the transition period.

The Article 2 commitment is about protecting the specific rights that individuals are afforded under the Belfast/Good Friday agreement and non-discrimination in this regard. It is supported by six EU equality directives that are all designed to tackle discrimination because of specified protected characteristics of individuals and to promote equal treatment. It will be part of the role of both commissions, through the dedicated mechanism structure, to monitor, advise, report on and enforce the Article 2 commitment and report to the Government and the Executive Office in Northern Ireland in this regard.

As I have said, we have already delivered the relevant legislative measures to give effect to Article 2 of the protocol, and no further amendments are required in this regard. I can assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward and will not be impacted by the outworkings of this Bill.

In reply to the noble Baroness, Lady Suttie, I can say that, for statutory requirements to be relevant requirements under Clause 6, they must be requirements that apply to, or in relation to, goods sold in the nation in question. If the employment law requirement were to meet that test, they would not be disapplied because they had discriminatory effects.

I hope that, with those assurances, that the noble Baroness, Lady Ritchie, will not press Amendment 24.

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

I call the Baroness, Lady McIntosh of Pickering.

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[Lord Callanan (Con)]

In short, I addressed the point made by the noble Baroness, Lady Suttie. No, I do not believe that this will be a problem. We will, of course, keep it under review if any such problem were to be relevant. We think that we have already legislated to ensure these requirements and that, therefore, this amendment is unnecessary.

[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.

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

I think that I am now safe to call the noble Baroness, Lady McIntosh of Pickering.

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[Lord Naseby (Con)]

My Lords, I respect the views of the noble Baroness who has just spoken, but I have to say that there is little in what she said that I agree with. Amendments 21, 48 and 49 are quite different from Amendments 10 and 11. They go, in my judgment, way beyond what is necessary for a successful free trade market. Really they amount to micromanaging, and on the whole Her Majesty’s Government in any form, whether it be devolved or central, certainly are not terribly good at managing commercial activities. So I suggest that those amendments are unacceptable.

Amendment 11 is one that I warm to because the environment is absolutely crucial. In that context we include climate change, which we know is affecting every nation in the world, so that is a very serious area. Whether this amendment is the right one or not is almost for the Government to decide. I care deeply about the environment. I am privileged to live outside London. I shall drive home tonight, 50 miles to Bedfordshire, and it is a very nice environment there. It is essentially a horticultural one, which brings me to the point that horticulture is changing, not least because we are looking to achieve a fair degree of import substitution. All sorts of new challenges arise from that. We virtually gave up in the glasshouse world, losing out to Holland. There is all sorts of experimentation going on—growing vegetables just in water and so on—but this is not the time to go into that.

I do worry that there are products at the margin, where there is always somebody lobbying against them. Smoking has been mentioned. I have never smoked, but I accept the current situation in which people have the right to smoke if they wish to, and there are clear frameworks in which they can follow that. Pesticides are important in the horticultural world because they affect yields; again, that is a controversial area. So I will listen to my noble friend, particularly on Amendment 11, about which I have a reasonably open mind. I know that the environment is absolutely crucial, but I do not want to see areas of our society and our market squeezed out because of some heavy lobbying from one particular group who do not like the particular industry involved.

[Lord Callanan (Con)]

My Lords, Amendments 10, 11 and 41 would expand the list of legitimate aims used to justify where statutory requirements in one part of the UK can indirectly discriminate against goods or services from another part of the UK. So I will start by saying that the Bill provides an updated, coherent market structure which will help to avoid future complexities and prevent costs being passed on to customers through an increase in prices or a decrease in choices. An expansive list of legitimate aims would increase the potential discrimination faced by businesses or service providers, eroding the benefits of the internal market and creating damaging costs and internal barriers to trade.

The current list in the Bill is targeted to allow nations to meet their respective goals while avoiding unnecessary damage to the internal market—a point that was well made by my noble friend Lady Neville-Rolfe. For example, the Bill already includes the protection of public, plant and animal health, and in some cases, of course, this will align with the protection of the environment. However—I cannot stress this enough—the Government have repeatedly committed to maintaining our world-leading standards across a number of different areas, whether that is in consumer protection, the environment, social and labour standards or public, animal and plant health. The Bill does not undermine the great strides that we have taken in these areas, and we will continue to be at the forefront of improving and protecting our high standards.

Under this Bill, the devolved Administrations will retain the right to legislate in devolved policy areas. Legislative innovation remains a central feature and, indeed, a strength of our union. The Government are committed to ensuring that this power of innovation does not lead to any worry about a possible lowering of standards, by both working with the devolved Administrations via the common frameworks programme and by continuing to uphold our own commitment to the highest possible standards. It is important to remember that the market access principles do not prevent the UK Government or the devolved Administrations adopting divergent rules for goods or services.