United Kingdom Internal Market Bill

Lord Fox Excerpts

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Monday 9th November 2020 Lords Chamber

These clauses may make us uneasy; they may propose powers that unnerve us or cause us to feel distaste. They also remind everyone involved in the Brexit trade negotiations, on all sides, just how high the stakes are and what is and is not acceptable to Her Majesty’s Government. As I said, I am a stout defender of the Good Friday agreement. I also fervently hope and believe that the Brexit trade talks will bear fruit in the best interests of the United Kingdom and our many friends who remain within the European Union. It is my clear understanding that this has been the approach taken consistently with this Bill by my noble friend the Minister and his colleagues. At this moment of historic significance, they need our steadfast support. If we in this House withhold that support, I fear we may be playing with fire.

[Lord Fox (LD)]

My Lords, it is a great honour to be speaking towards the end of this long debate, in which so many distinguished, wise and opinionated speakers have held forth. This debate complements the one we heard at Second Reading, which ended with an overwhelmingly large regret vote. Today, we have heard the legal reasons for objecting to Part 5 of the Bill. They were set out clearly by the noble and learned Lord, Lord Judge, and have been supported by legal Peers and others across the Floor. We also heard speeches explaining the effects of this Bill across the island of Ireland; I was particularly moved by the words of the noble and right reverend Lord, Lord Eames.

I am going to look elsewhere and focus on the politics, my subtitle being: “What were the Government thinking when they drafted this Bill?” It is a rhetorical question as I do not expect the Minister to answer. In today’s media round, Ministers were sent out to plug No. 10’s messages, one of which was that this Bill gives legal certainty. Well, it is certainly illegal but, as we heard very eloquently from the noble Lord, Lord, Carlile, the only certainty it brings is that the UK cannot be trusted.

We heard at Second Reading how little faith the EU had in the Prime Minister even before he climbed over and clawed past his predecessor to become Prime Minister. This Bill now confirms the European Union’s view and cements its distrust of the negotiation process. Does the Minister suppose this distrust has made sealing a UK-EU trade deal easier or harder? If it were going to help, we would, I suggest, have seen some movement by now; yet we still do not have anything that even this shameless Government can dress up and brand as a deal.

As we have heard, there is now a seismic shift across the Atlantic where the ground is getting very shaky for the PM. He is losing his perilous foothold and scrambling around as the UK slips down the future President’s to-do list. We should not be surprised. A law-breaking Government might have impressed President Trump but, when there is an Irish-American President in waiting, this Bill is not a good look. George Eustice, sent out this morning to shield the Prime Minister, was quick to say that if Joe Biden had read the Bill, and not just reports of the Bill, everything would be all right. This is patronising. It is patronising to the future President of the United States, a man who has always taken a very close interest in Irish issues, and it is not only patronising but wrong. When the President-elect read this Bill, he saw what we see: a direct undermining of the Good Friday/Belfast agreement.

In political terms, this Bill threatens the EU and US free trade deals—the Government’s two stated paramount trade objectives—and it threatens the stability in Ireland, one of the great political achievements in my lifetime. It is not just bad law; it is absolutely terrible politics.

In a few minutes, I expect the Minister to mount a defence. He will claim that Part 5 of the Bill is vital, which my noble friend Lord Newby dealt with very eloquently. I doubt that the Minister will repeat the Northern Ireland Secretary Brandon Lewis’s statement that this Bill will break the law because—and I am sorry to Members opposite, all of whom appear to be non-lawyers pronouncing on the law—it is the Government’s settled position that this breaks the law. In this regard, I am happy—or unhappy—to say that the Government are right: Part 5 allows the Executive to break the law, when they choose and without restraint. That is why the whole of Part 5 comprises a legal affront, which is a huge political mistake.

The Committee will shortly be asked whether we want Clause 42 to stand part of the Bill. Noble Lords on these Benches will be voting “Not content” when that question is put, and we will continue to vote “Not content” when each clause is put forward. It is wrong and we are not content that the Government should bring the whole country into disrepute, not content that we should cede political leverage in the world at large, and not content with the wider implications of Part 5, not least on the island of Ireland.

[Lord Falconer of Thoroton (Lab)]

It is a pleasure to follow the noble Lord, Lord Fox, who has been a tower of strength throughout the course of this very complicated Bill. I join other noble Lords to express my deep sorrow at the untimely death of Rabbi Lord Sacks, who made a very major contribution to thought, spirituality and life in this House.

The noble Lords, Lord Howard of Lympne, Lord Empey and Lord Pannick, the noble and learned Lords, Lord Clarke of Nottingham, Lord Mackay of Clashfern and Lord Judge, the noble Baronesses, Lady Ritchie of Downpatrick and Lady Bennett, all Labour’s Members, all the Lib Dems, the noble and right reverend Lord, Lord Eames, the noble and gallant Lord, Lord Stirrup, the right reverend Prelate the Bishop of Leeds and the most reverend Primate the Archbishop of Canterbury constitute, by any standards, a pretty broad church—broader than you normally see in this House. Sadly, none of them is Marcus Rashford and therefore guaranteed to get a U-turn. Nevertheless, they are a powerful group and all say the same thing: first, pull back from making the United Kingdom an international law-breaker; and secondly, do not threaten to break the Northern Ireland protocol, which ensures an open border on the island of Ireland and promotes peace through the Good Friday agreement.

Today, tomorrow and in the weeks, months and years to come, the United Kingdom will depend on our international relations with the United States of America, the European Union and the rest of the world for security and trade, to fight the climate emergency, to co-ordinate the search for and distribution of a vaccine, to fight this and future pandemics and to co-ordinate the world’s response to the massive economic downturn we are in. We will need international agreements to do it. It is hard to imagine an act more damaging to the United Kingdom’s national interest than to place the UK beyond the pale of law-abiding nations, which is what the Government wish to do.

I strongly urge the Government to take the lifeline that the House of Lords is offering and accept that these law-breaking clauses were a mistake. The Government should say that these clauses will never again see the light of day. Please think about what the Government are embarking on with these clauses. If a free trade agreement and a settlement of the Northern Irish protocol issues are reached, then these clauses would never be needed. Suppose the Government do not reach agreement on free trade and the operational actions of the Northern Ireland protocol. If these clauses were ever used, they would guarantee, as President-elect Biden has said, that the United Kingdom would go to the bottom of the pecking order in Europe with the United States of America.

We have gone from popular United Kingdom to Billy No Mates in 10 weeks from 8 September as a result of the publication of this Bill. What is the justification for this disastrous proposal? Three have been given in the course of this debate. First, the noble Baronesses, Lady Hoey and Lady Fox, and the noble Lords, Lord Dodds, Lord McCrea, Lord Lilley, Lord Moylan, Lord Shinkwin and Lord Morrow, all gave variations on an argument that the Northern Irish protocol is a bad deal and they wished it to be renegotiated.

I respect those who did not like the Northern Irish protocol but it was entered into by the House of Commons with its eyes open. The House understood that the effect of the protocol was that to secure an open border, goods coming from Great Britain to Northern Ireland had to be checked to ensure that they complied with the single market regulations. Only in that way could the Republic of Ireland be sure that goods coming through the border would comply with the rules of the single market and you would not need a border as a result.

People may not like that. They may think that the checks that take place between Great Britain and Northern Ireland are inimical to the idea of Great Britain and Northern Ireland staying together, but that was the choice that the Parliament of this country made. A number of noble Lords said that democracy and parliamentary sovereignty justify this, conveniently forgetting that it was parliamentary sovereignty that led to the United Kingdom signing up to these international agreements. It was this Parliament that decided it and any call to parliamentary sovereignty is so misguided.

The second proposition advanced is that democracy demands that we allow this agreement, the Northern Irish protocol, to be broken. We are lucky to have in the House of Lords people who tell us how democracy should be interpreted. The December 2019 general election involved the winners, the Tory party, saying, “Agree to the withdrawal agreement and let us get Brexit done.” The country agreed to that. It agreed to the agreement that currently exists, not one that is about to be changed. The imprecations that we should be entitled, as a matter of parliamentary sovereignty or democracy, to change the agreement are very misguided.

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[Lord Fox (LD)]

My Lords, I express my sympathy and support for the amendments set out by the noble Baroness, Lady Rawlings. She makes a good point, and she has my support as a science graduate.

I oppose Clause 50 standing part of the Bill. It carries my name, alongside those of the noble and learned Lord, Lord Thomas, the noble Lord, Lord Stevenson, and the noble Baroness, Lady Finlay. The speeches given by the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Finlay, set out the issue. I have long wondered what the key drivers of this Bill are. We have had a debate around one of the areas, but the shared prosperity fund, which we have talked about before, and economic state aid, are key elements of the Bill, perhaps hidden in plain sight. We are now nearing the end of Committee, but we will return to this quite fundamentally on Report.

The noble Baroness, Lady Finlay, asked why the Government would reserve these powers, and then answered her own question: these are powers that the Government want for themselves. These are powers which they want to take away from the devolved Administrations; clearly, they would not be in the Bill otherwise. The Minister can shake his head, but if that is not the case, I am happy to hear why the Bill is written in this way.

The noble and learned Lord, Lord Thomas, asked a lot of very important questions on this point. I will ask a few more, and, given the lateness of the hour and the number of questions, will excuse the Minister if he writes rather than answering them tonight. However, we would like the answers in good time for Report, so that we can react to them. Around the frameworks, which the noble and learned Lord, Lord Thomas, raised, is state aid still an outstanding issue where no agreement has been reached, as it was in the last update? If it is still outstanding with no agreement, what are the stumbling blocks? What is stopping agreement and, overall, is this intended to become a legislative framework, or will this Bill and the proposed regulations simply impose a system, rather than continue with the frameworks process?

The frameworks agreement says that they will replicate existing flexibilities. Will this still be the case, or have the Government walked away from this commitment? Will the devolved Administrations still administer economic state aid? It was clear from what the noble and learned Lord, Lord Thomas, said, that he believes that they will not. Can the Minister clear up how that will be shared out, because the devolved Administrations have developed the in-depth knowledge of their areas to be able to do this properly. It would be very damaging to lose that expertise when the United Kingdom needs, more than anything, to invest effectively in growth. Finally, will de minimis levels without notification continue? One reading of the Bill is that even de minimis levels could breach the market access principles. Can the Minister confirm that?

There are too many uncertainties in this. That is why noble Lords have talked about not allowing Clause 50 to stand part of the Bill. On Report, we will have to look very closely at how this is done. It will help tremendously on Report if the Government and the Minister, today or in a written response, give a very clear picture of how they see the different cogs in this system working, how they will work together and how there will be a form of democratic and devolved Administration oversight for what is happening. If there is not, this will, I am afraid, be another bone of contention .

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[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

I have received a request to speak after the Minister from the noble Lord, Lord Fox.

[Lord Fox (LD)]

With every answer, there come more questions, I am afraid. The Minister sought to explain that the devolved authorities will still be able to spend the money—I think those were the words that he used—but I am interested to know to which money he is referring. How in future will they get their hands on the money? Will there be a competitive bidding process? Is it part of the formula? Is that the money that he is talking about? Perhaps he could outline what he means by “the money”, because it is not entirely clear to me. He is looking at me as though I am being slightly stupid and I shall be very happy to be educated by him in writing rather than verbally.

[Lord Callanan (Con)]

I certainly did not intend to imply that at all and I apologise if the noble Lord got that impression. I was talking about the existing block grants that the devolved Administrations have. It is their existing spending power—the money that they spend at the moment. They will continue to make decisions about their devolved spending on subsidies, as they do at the moment—how much, to whom and for what—within any future UK-wide subsidy control regime if, following consultation, the Government and Parliament decide that we want to legislate in this space. I hope that I have resolved the noble Lord’s question; if not, I will certainly write to him.