United Kingdom Internal Market Bill

Lord German Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

[Lord German (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Desai, because I want to talk about the union—the union of which we are all members. I remind the Government that the union that we now call our United Kingdom is very different from the union that existed prior to our membership of the European Economic Community. We have now had more than 20 years of devolution, and the Bill threatens the union as we know it. Many noble Lords have given examples of how it threatens devolution, and I pay tribute to my noble friend Lord Shipley, who talked about the health implications, and to the noble Baroness, Lady Finlay, who also spoke on this matter. So there are big questions about the union, and they are what I want to address.

First, do we need the Bill now? I do not think we do, because there is no threat to the internal market at the moment. The common frameworks, which are close to agreement, could be used in their draft form, if they are not finally detailed and ready. Common frameworks do not even get a mention in the Bill, yet that work has been going on for two years.

Have the Government put in place appropriate dispute procedures? No, they have not. The Government’s engagement with the devolved Governments has not given an inch on their involvement. Will the Bill weaken devolution in our country? Yes, it will, because it produces override and bypass mechanisms that have the effect of reducing devolved powers. Will the Bill guarantee high regulatory standards? No, it will not, by creating a system that places you at a competitive disadvantage if you follow high standards. Will the Bill promote co-operation and trust between the Governments of the UK? That is an easy one: no, it will not. It will self-evidently not, because of the approach to devolution that the Government have shown. The evidence is that it has managed to bring together three very different democratically elected Governments in their view that it is not the right thing to do.

I will mention a few words on Part 6 of the Bill. That is the add-on part, related to spending. It is not clear how that links to the proposed regulatory structure for the UK internal market, which is the intention of the Bill. Perhaps, in reply, the Minister can say why this section is there at all.

In answer to an Oral Question of mine in your Lordships’ House earlier this year, the Government stated that Wales would receive, pound for pound, what it had previously received from the EU, and that that money would be controlled by the Welsh Government. The question that the Bill documentation does not address is whether the Government still intend to follow the pound-for-pound statement they previously made, and that any money proposed to be spent in devolved areas by this UK Government is in addition to the former EU funds replacement. I must say that the reference to “EU programmes” in the impact assessment says to me that the Welsh Government are set to lose control over these funds.

As it stands, it is very unlikely, almost impossible, to see this Bill having the support of all three devolved Administrations. However, with amendment, there is a very slim chance that it could meet with the agreement of the Welsh Government. I ask the Government to live up to the agreement they made in July 2017 that a UK internal state aid framework needs to be drawn up co-operatively and consensually between the UK Government and the devolved Administrations as equal partners. The Government must avoid actions that could lead to the breakup of this union, but to defend the union, you have to have respect for it, you have to have regard for it, and that is simply not apparent from the way this Government are proceeding at this time.

United Kingdom Internal Market Bill

Lord German Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

Let us follow the example we set with that legislation. There is no need to agree to the blunderbuss approach in this Bill. A great deal of work has gone into the common frameworks already, work that can and should be built on. At the end of the day it will help restore confidence by demonstrating that the Government genuinely want to respect all four nations of the UK and do not want to fuel separatist rhetoric. I beg to move.

[Lord German (LD)]

My Lords, these amendments have been prepared by the Welsh Government and have their support; I am pleased to support them. The Welsh Government, as noble Lords know, are committed to the union of the United Kingdom. These proposals before us today seek to find a route through in the way that the Bill has been put together. In fact, they intend to put the horse before the cart rather than the cart before the horse. In the discussions that we had on the previous group and subsequently, there have been for me some very puzzling matters, and I am trying to work out quite where the Government have placed themselves.

First, on timing, the Government seem to argue that we must have the Bill in place in its entirety so that on 1 January they can move forward and have something absolutely concrete to work from. I will come back to that point in a moment. The second point is that the Government have not been able to find any way to describe something which falls outside the area of the structure.



In the last round of amendments, the Minister described additives for flour. Flour and additives are part of the common framework on nutrition. I am told that the three frameworks which are already on the way to early delivery and will be fully operational by the end of the year cover nutrition, hazardous substances and emissions.

I am puzzled why the Government are not able to provide any specific examples of what falls outside the framework, apart from “the future”. We do not know what the future is, but as it arrives we will sort out legislation and frameworks as we move along. That is bound to happen.

Timing is another puzzle because the Government do not want to proceed with the common frameworks as the underpinning structure for this Bill. They seem to want to use what the noble Baroness, Lady Finlay, called a blunderbuss. Battle axe might be another way of putting it. Basically, they do not want the co-operative approach which has been at the forefront of these frameworks.

In September, the Government published their view of the frameworks. Right at the front—on the first page—were the principles which the Government are now seeking to break about the way in which they intend to govern, and about giving and not taking away powers from the devolved Administrations. They were right at the top of the Government’s own papers as recently as last month. If the Government want to put them front and centre, but need something temporary, why not say so? Why not put in a sunset clause, or some form of clause which says this will be a temporary measure until particular frameworks are in place?

The Government’s position is not defensible inside Wales as I know it. The Welsh Government have sought to bring forward a proposal which meets the Government’s aspirations. It says, “Put the common frameworks first and then, if there is any dispute whatever, use the backstop which is being put into this Bill through regulations.” We all want to see an alteration to the way in which they have been carried out and for there to be adequate consultation and debate.

My concern is that I am not certain that the Government know where they are going. I am not certain that they know what they mean by “putting the common frameworks front and centre”. Is this a timing issue? I hope that the Government will be able to answer all these questions.

I want to talk briefly about the one-use plastic teaspoon. They will be banned next year by the Welsh Government, through the Welsh Assembly, because they are bad for the environment and do not degrade in the soil. One-use cutlery is damaging for us as a country and for our environment. However, if that legislation is passed, there is nothing to stop a whole generation of English single-use plastic spoon manufacturers bringing them across the border and distributing and selling them wholesale in Wales. This is an extreme example, but it illustrates that there are bound to be some divergences if the power exists. If, as a Government, you have been given powers and you want to enable them, but you find you are being stopped because of this sort of extraordinary behaviour by a Government somewhere else, that is not going to help the union. The union of this United Kingdom is to be treasured, but to treasure it you have to respect it. I do not believe that the Government are doing so in this Bill. So I ask them all those questions about the direction in which they are going. Will they try to outline whether these frameworks will be placed front and centre? Is it a timing issue? Can they come up with some examples—one would do—which would tell us where the gaps are?

[Baroness Andrews (Lab) [V]]

My Lords, I can speak more briefly to this amendment than the one I spoke to earlier, because my arguments will be much the same. What attracts me particularly about this amendment is that it once again asks the Government to look at the possibility of putting in the Bill the process whereby the Bill becomes the default position and the common frameworks process has to be exhausted before the market principles kick in. I have said before that I think that this is logical. It helps the Government to achieve their own objectives.

When the Minister replied to the previous debate, it was very welcome to hear him say that he was prepared to give more thought to things he had heard the House say this evening. He seemed to think that this process of exhaustion was somehow going to be rather difficult and messy to achieve. From what we have seen in the Common Frameworks Scrutiny Committee, the dispute resolutions are worked out very clearly and in detail. I do not see a problem with that process at all and I would be happy to talk to the Minister about it. If he is worried about that, we can provide some reassurance and, as we scrutinise it, there may be some things we can do to improve the process. If it is a technical problem, then that is what we are here to solve. If it is a problem in principle, then we need to know; he needs to tell us.

The rest of the amendment is slightly more legislative in structure than the amendments from the noble and learned Lord, Lord Hope of Craighead, but I continue to support it in principle because it flags up the significance of common frameworks and the importance of the need for a fit between the Bill and the common frameworks.

The noble Baroness, Lady Finlay, asked me whether we had come across any areas where there was deadlock or difficulty in securing agreement. In the summaries of the frameworks that we have seen so far, and in the one completed framework, we have not seen anything that would alert us to the fact that there is a continuing problem. The problem that the framework negotiators have is the unsettled nature of European negotiations and the issues posed by this Bill itself. They are bound to be waiting for resolutions of different sorts. The processes that they are establishing are clear, transparent and robust. As I say, they offer a solution in practical terms, as well as, frankly, in ethical and political terms, as far as the Government are concerned.

With that, I simply say that I am pleased to support the amendment in principle. I look forward to the Minister, the noble Lord, Lord Callanan, having another go at some of these very specific questions that I think we have a right to hear some answers to.

United Kingdom Internal Market Bill

Lord German Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Lords Chamber

[Lord German (LD)]

My Lords, I have added my name to Amendment 21 to which the noble Baroness, Lady Finlay, has spoken. It seems to me that the clarification that the amendment is seeking is to understand whether, where a statutory regulation, rule or law is passed in a devolved Administration, that would exist until such time as the UK Government decided something different. Whether or not that is the intention of the Government, I do not understand.

The difficulty that I face in trying to work out the logical progression and the sequencing of what is happening in this Bill is correlated with the issue that we had on the common frameworks. It seems to me that the Government are moving down a dual carriageway in which one road is the internal market Bill and the other is the common frameworks progression, and between them is a brick wall. I do not understand how you can cross over between one and the other. That is the understanding that I got from the discussion we had in the earlier days in Committee.

The problem is that by the end of this year—I will use this as an example, which I would like the Minister to respond to at the end, if he would—the framework on emissions trading, which is a legislative framework, will be completed. I understand that it is with Ministers for final sign-off, but it has been agreed. If that emissions trading legislative framework is agreed, presumably there will then be legislation. I would like to understand where that legislation fits within the context of this Bill. Clearly, that has been reached by agreement—it has been agreed by all parts, including the United Kingdom Government, that there will be a legislative approach to this particular area of work. Then, of course, there will be a piece of legislation that sits either within this Bill or without it. I would like to know where that legislation will occur: will it be stand-alone legislation or will it be an amendment to the Bill we are discussing today?

There are two other frameworks—one on nutrition and one on hazardous substances—that are also virtually complete. They are non-legislative, and I understand that they will be agreed by Christmas. Take those three areas: on one side we have a legislative proposal and on the other we have a non-legislative proposal that the Government have agreed will be a non-legislative proposal and will therefore not require other legislation. And it will not require this legislation, because that is what the Government have agreed. Perhaps the Government could explain how the two are interconnected.

I understand that the reason for turning down a frameworks-only approach is because there are gaps, but we are yet to find out what the Government have established is a gap. We have asked for a current example that we can use, and I hope that, over the past few days, the Minister has found a current example that he can give us.

It seems to me that the fundamental principle that Amendment 21 is trying to establish absolutely is that, where there has been a legislative agreement or legislation that has been passed by either Wales, Scotland or Northern Ireland, when the Government introduce new legislation or regulations on the back of this legislation, such legislation will look only at the future and not the past and will have no retrospective effect.

[Baroness Noakes (Con)]

My Lords, I would like to remind the Committee of two things about this Bill. First, the Bill is to facilitate trade between all parts of the United Kingdom, not make it harder. Secondly, businesses favour barrier-free trade. That was the very clear message that came from the consultation on the White Paper during the summer. We should be trying to minimise the possibility of barriers being put up to trade within the United Kingdom.

If we allow exclusions of goods from mutual recognition, that will inevitably lead to higher costs. This is analysed in quite considerable detail in the internal market White Paper. Costs generally end up being borne by consumers. Excluding goods can also result in businesses deciding to withdraw from certain markets, which can in turn restrict consumer choice. I know the noble Baroness, Lady Hayter, is keen on consumer protection; she reminded us of that on the first day of Committee. Restricting trade tends to operate against consumer interests, so we should be very careful in trying to put amendments to the Bill that make trade more difficult. I also remind noble Lords that restricting trade is more likely to hit the devolved Administrations’ economies because of their greater dependence on exporting to the rest of the United Kingdom.

I want to comment on a couple of the amendments in this group, Amendments 7 and 8. The noble Baroness, Lady Hayter, said that Amendment 7 was a probing amendment, but by seeking to exclude imports into any part of the United Kingdom we are reducing the internal market rules to a very parochial interpretation. It seems to ignore the plain fact of commercial life, which is that there are complex supply chains and complex distribution logistics. It is of course the way we have been living in the EU; at the moment, we are quite accustomed to importing in one place and those imports being accepted throughout the rest of the community.

It also seems to me that the noble Baroness’s amendment would, in effect, impact exports between different parts of the United Kingdom. For example, if something was exported to Wales and imported to England, it would stop it then being imported into Scotland with the protection of the internal market Bill. That does not seem to make any kind of sense. It is pretty clear from the impact assessment that Wales and Scotland in particular are reliant on intermediate goods coming from other parts of the United Kingdom.

The noble Lord, Lord Rooker, spoke to Amendment 8. I did not follow what he said about pig semen because I do not think that, by any definition, pig semen is an animal feedstuff. I did have a chance to check the definition of “animal feedstuff” while he was speaking, and it is not. Perhaps we can put that to one side. We have to understand that if we try to exclude food and animal feedstuffs from the UK internal market mutual recognition rules, this will again potentially impact the devolved Administrations the most, given their import and export profiles. For example, if you look at Wales’s agri-food chain, you will see that 48% of agricultural inputs to Welsh food manufacturers come from the rest of the UK and 31% of food and drink sold in Wales comes from the rest of the UK. We should be thinking really hard about who we are likely to hurt when we put amendments such as this in the Bill, which restrict barrier-free trade.

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Moved by

[Lord German]

15: Clause 3, page 3, line 30, leave out “consult” and insert “obtain the consent of”
Member’s explanatory statement
This amendment requires the Secretary of State to obtain the consent of the devolved administrations before making regulations amending Clause 3(3), which specifies the types of statutory requirement that are within the scope of the mutual recognition principle.

[Lord German (LD)]

My Lords, the noble Baroness, Lady Finlay, is detained in another part of your Lordships’ House. I will move Amendment 15 and speak to Amendments 30 and 64 in this group, which attempt to place one limitation on the extraordinary and extensive Henry VIII powers that we were talking about in the last group: namely, they require the consent of the devolved Administrations to using those powers. Amendments 15 and 30 would impose this requirement in relation to Ministers’ power to remove or, more worryingly, add to the statutory requirements that are

“within the scope of the mutual recognition principle”

and “the non-discrimination principle”, respectively. Amendment 64 would require devolved consent for any guidance issued in respect of Part 1.

I must say that I am very attracted to the amendments tabled by my noble friend Lord Fox, which would simply strike out the Henry VIII powers in Clauses 3 and 6. As your Lordships will know, these have been strongly condemned by the Delegated Powers and Regulatory Reform Committee—a matter to which I will return later.

Without amendments such as these, it would be possible for the Government to strip back still further the very limited exemptions that these clauses provide for, which are far more limited than is currently the case with EU law, where the principles of subsidiarity and proportionality apply alongside far broader public policy exemptions. I remind your Lordships and the Government that they are working on the basis of principles that they repeated last month and established in October 2017—that they would move forward under

“established conventions and practices, including that the competence of the devolved institutions will not normally be adjusted without their consent”.

Those words, “without their consent”, represent a principle to which the Government have signed up. That is why the amendments of the noble Baronesses, Lady Hayter and Lady McIntosh, seek to engage with the devolved Administrations but do not require the Government to achieve their consent.

Obviously, either amendment would be preferable to the current problem, but the issue is that it would be easy for the Government to demonstrate that they had sought the consent of the devolved Administrations on a wholly unreasonable proposal, and the fact that it had not been forthcoming would have no relevance at all. Therefore, the Government could report that they had consulted the devolved Administrations and tick the box required without even attempting to address their concerns.

I return to the issue of secondary legislation; that is the source of these amendments because the powers are so sweeping and there is no restriction on, or knowledge of, what they will deal with. As noble Lords may be aware, three committees of your Lordships’ House have expressed concern about these matters. The Delegated Powers and Regulatory Reform Committee, the Secondary Legislation Scrutiny Committee and the Constitution Committee all wrote to the Lord President of the Council, the Leader of the House of Commons, who has government responsibility for the way in which delegated powers are used.

In Jacob Rees-Mogg’s reply of 19 October, he said:

“I agree that Bills with substantial powers, though sometimes essential, should not be a tool to cover imperfect policy development. As a Government, we must have a clear direction and be able to explain to both Parliament and our constituents how we are fulfilling the promises of our manifesto. I can see that extensive use of delegated powers can hinder rather than help us in that. Therefore, I am happy to consider issuing communications to Secretaries of State on this matter, encouraging them to minimise the use of delegated powers where possible”.


I ask the Minister: has the Lord President of the Council, the Leader of the House of Commons, consulted him on the matters that he is putting before us today? If so, will he heed that warning from Jacob Rees-Mogg?

The other matter that concerns me, which my noble friend Lord Purvis talked about, is the extent to which the powers can be used in a variety of ways. I reflect on the environmental aspects, which the noble Lord, Lord Callanan, just talked about, in relation to the recycling of materials, which is one of the issues on which the Government may wish to introduce regulations. The reason for that might well be that they have a concern about the environment, such as the nature of plastic film or single-use plastics; they might want to introduce those requirements.

However, it could go the other way and make the problem worse. For example, you might stop a devolved authority banning the use of plastic spoons or using plastic film on fresh food. The Government have admitted that they want to carry through all those health and environmental considerations by saying that they are looking at the recycling of materials as something that it might touch in the future.

Therefore, it seems to me that we have grave concerns about the way changes in these areas will be implemented. If we follow the advice of Jacob Rees-Mogg, then, certainly, we would not seek these powers in this Bill at this time because they do not include the policy intent that is to be provided. In these amendments, we can ensure that the consent of the devolved Administrations is given and that we can address and seek their approval, but it would be far better if we did not have these delegated powers at all.

[Lord Hope of Craighead (CB) [V]]

My Lords, as the noble Lord, Lord German, just said, it would be far better if we did not have these provisions in the Bill at all, but one must assume that they may remain. That is why these amendments, particularly Amendments 15 and 30, to which I have added my name, address the provision which talks about consultation but does not mention the word “consent”.

I have two requests for the Minister; I will not elaborate further on what the noble Lord, Lord German, said in his very helpful introduction to this group. First, would he be good enough to repeat, in the context to which these amendments refer, the assurance he has already given that the Sewel convention principles will be applied without any hesitation in regard to consultation?

Secondly, will the Minister consider whether it would not be wise, in view of the importance of the clauses in which these provisions appear, to adopt the system used, he will recall, in the European Union (Withdrawal) Act 2018 when considering the system of seeking the consent of the devolved Administrations—Assemblies, Senates and Parliaments—to the modification of EU law? He may recall that Ministers were given power to restrict the powers of the devolved Administrations to modify EU law in certain respects by delegated legislation. Provided for in Part 1 of Schedule 3 was a system whereby the Parliaments, Senate and Assembly were given an opportunity to provide consent. The wording in the Scotland provision was:

“A Minister of the Crown must not lay for approval before each House of the Parliament of the United Kingdom a draft of a statutory instrument containing”


the relevant

“regulations … unless … the Scottish Parliament has made a consent decision in relation to the laying of the draft, or … the 40 day period has ended without the Parliament having made such a decision.”


If it came to the point of there being no consent, when the Minister of the Crown laid this draft, as mentioned, before either House, he would be required to explain his decision to lay it without the consent of the Parliament.

That system was arrived at after a great deal of discussion in the 2018 Act; it is quite a useful one that might well be thought appropriate in this case to reduce the element of dismay which the devolved Administrations are feeling about how they are being treated by these provisions—all that has been provided for is consultation. They would at least have an opportunity in their legislatures to consider whether consent should be given. Of course, if they fail to give it within 40 days, ultimately the Minister can go ahead, provided he explains why he is doing so. There is no amendment to this effect, but this is an opportunity for the noble Lord to consider whether it would not be wise to soften the blow that has been felt by the devolved Administrations by adopting that system, which was so carefully worked out and eventually accepted in the 2018 Act.

Beyond that, I support everything the noble Lord, Lord German, has said in support of the amendments to which he has spoken.

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In reiterating the Government’s intent to engage in the most positive manner with the devolved Administrations going forward—as well as their sense of duty to maintain the smoothly operating status quo in our internal market—I hope that I have addressed the concerns expressed through these amendments. I ask the noble Lord to withdraw Amendment 15.

[Lord German (LD)]

This has been a very thoughtful debate. I think that it has got to the heart of the problem, which is how the UK Government regard the whole devolution settlement and the way that the United Kingdom currently operates.

I think the mood of the Committee is that we want to get a sense of moving together to sustain and develop our union. In that sense, we require consent, because consent is what eventually drives these matters forward. I pray in aid of the view of the CBI. It is often said in this Chamber, “Business needs to have this. Business needs to have that”. The CBI has said that it wants a collaborative approach, rather like the frameworks that are being used. That is the style that we need to ensure the Government provide.

We have had some very powerful commentary about the way our union should work. If you want to work together for consent, you need, as many noble Lords have said, a method for dealing with any disputes that may come at the end. There have been many suggestions, including from the noble Lord, Lord Hain, and the noble and learned Lords, Lord Hope and Lord Mackay of Clashfern. They talked about how to resolve these matters to move forward together. My sense is that, at the moment, the Government have not got the mood right. They have not felt that there is a need to move together in a way that people feel is the right way forward for the whole of our country.

In passing, one of the effects of what we have been discussing in this group of amendments is of course that it will lead to the end of EVEL in the House of Commons. Basically, everything will have a commentary on everywhere, and therefore it will not be possible to ban Scottish MPs from debating and voting on particular issues. So it will need a change of the way in which Parliament operates as well. But clearly what this whole debate has been about is the collaborative approach and the way in which we can work together in the thoughtful way that people have talked about. What the Minister needs to consider is how you can rectify the deficiencies of that mood inside the Bill.

The right honourable Jacob Rees-Mogg said that the regulations that you produce should clearly express the policy intent. I do not think the policy intent is closely laid out in what these regulations are going to be there for, whereas the collaborative approach would be to say very clearly, “Let’s work together as we go through to the future, and we’ll have some mechanism by which we can resolve disputes between us”. Because I think we are all looking for—and accept that we have to have—a fully functioning internal market. We have to have a sense of divergence, which we already have within our United Kingdom, where already we have a functioning internal market. But we also have to know that there are systems in place in this place and in the Government that will make it all happen.

I thank all noble Lords for their very thoughtful contributions and beg leave to withdraw the amendment.

Amendment 15 withdrawn.

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[Baroness Noakes (Con)]

My Lords, as noble Lords who have attended this Committee to date know, my role is occasionally to get up and give a minority perspective on the amendments before us. There are 20 amendments in this group and, one way or another, each of them would allow barriers to trade to be erected by one or more of the devolved nations. The effect of the amendments is to restrict the amount of trade to which the market access principles will apply and thereby reduce the extent to which barrier-free trade can take place throughout the UK’s internal market. I say to the noble Lord, Lord Anderson, that that is not an argument against devolution; it is an argument for trade and economic success, which I hope that we all want to achieve for the United Kingdom.

I will not repeat all of what I said on the earlier group, but the more that laws relating to trade in goods and services diverge between the component parts of the UK, the more likely it is that costs will rise and choice will diminish for consumers. Barriers to trade are also likely to result in lower GDP, as the impact assessment analysed, and we need all the GDP that we can get at the moment, given the impact of lockdown and similar anti-Covid measures. I am sure all those noble Lords who support and voted for devolution did not vote to become poorer through devolution.

The amendments give very considerable cover to the devolved Administrations to erect trade barriers under the guise of higher standards but, actually, on grounds of protectionism. At the very least, I predict that there will be massive scope for lawyers to argue for a very long period and to mount legal challenges. That may well be good for the fees of the legal profession—and for the noble and learned Lord, Lord Falconer of Thoroton—but the important thing I want to stress is that it will result in uncertainty for business. If there is one thing that is bad for business, it is an uncertain business trading environment.

Therefore, while I understand the desire for higher standards—and many noble Lords have spoken to this in respect of the particular varieties of relaxation that they are seeking in the Bill—at the end of the day, they can result in trade barriers. We really should be very careful not to wreck the UK’s internal market before it has even started.

[Lord German (LD)]

My Lords, I shall address Amendment 54 in my name. As the noble Baroness, Lady Finlay, said in moving her amendment, it harks back to debates we have had on the mysterious absence of common frameworks from the Bill. As your Lordships will know, common frameworks are a way of doing business that is supported by the CBI. The amendment would insert a new schedule into the Bill. It may look arcane, or like an obscure pub quiz question, so perhaps noble Lords would like to answer the question: what unites ozone-depleting substances and Caerphilly cheese? The answer is that the list in the schedule is the list of subjects where all four Governments in this country have agreed that legislative common frameworks are necessary. However, this is not intended as an exhaustive list. It would be possible to add to this by secondary legislation if new areas emerge that require a common framework.

I concede that it would not have been necessary to have such a schedule if the dual carriageway with the brick wall in between the two approaches that the Government are taking—this Bill and the common frameworks—were guaranteed to coincide and meet. Both approaches are progressing and have the enthusiasm of the Government behind them. This amendment would be a way of ensuring that those approaches coincided and met. The amendment would help, since it identifies common frameworks without using the name.

One of the more striking aspects of the Bill, as noble Lords and Ministers keep telling us, is that common frameworks on their own cannot guarantee the integrity of the entire UK internal market. They are sector-specific and not intended to address the totality of economic regulation. In answer to every question asked, there has been a real silence from the Government, who have failed to identify any areas where the integrity of the internal market might be threatened that are not covered by common frameworks. We had reference to the threat to the sale of barley from English farmers to Scotland, which has proved an issue already resolved by the common framework. There is also the wholly hypothetical example of a devolved Government wishing to legislate for additives to flour, which is already in one of the common frameworks on nutrition.

We therefore have to manage this problem of having two-track approaches to the internal market. The amendment proposes a way of creating that gateway between the two and ensuring that there is a link between them, so that we know that we are on the same course for a functioning internal market.

[Baroness Randerson (LD) [V]]

My Lords, I have added my name to Amendment 174 in this group. I wish to speak to that and other amendments that I support.

Possibly the greatest asset that we gained from our decades of EU membership was the development of and assistance on the highest standards. In consumer and environmental protection, employment practices, public health standards, animal health and in the development of social policies, we have all benefited enormously and our quality of life has been greatly enhanced. Often, we as a nation were at the forefront of the development of those EU policies. On occasion, in our own legislation, we chose to adopt even higher standards, as my noble friend Lord Teverson said earlier. Those were the days when we really were world-beating. It is therefore very disappointing that the Bill contains nothing to guarantee high standards; there is no process set out to agree even minimum standards. The amendments in this group seek to rectify this, hence it is a legitimate aim to seek higher standards or to maintain existing standards.

Across the world, the experience of capitalism reveals that unfettered markets—capitalism in the raw—without a sound framework of standards often drive down standards to the lowest common denominator. For example, in the USA, hardly a country struggling for development, market access provisions unaccompanied by agreed minimum standards have led to deregulation as a way to attract business. It is well known as a ploy.

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[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

The noble Lord, Lord Liddle, has withdrawn from this group, so I call the noble Lord, Lord German.

[Lord German (LD)]

My Lords, I thank the noble Baroness, Lady Bennett, for raising this issue. It is of significance, and the Government will need to make some clear statements in order to avoid a very large flaring up of problems as a result of this matter.

Professional teacher registration is a devolved matter. The General Teaching Council for Scotland was established in 1965 and has ownership of the standards for teachers seeking registration and employment as a teacher in Scotland. The Education Workforce Council for Wales, Cyngor y Gweithlu Addysg, was established by the Education (Wales) Act 2014 to register schoolteachers who wish to work in schools in Wales. Teachers in Wales have to have qualified teacher status and be registered with the body in order to work in the profession. In England, since the introduction of the Teaching Regulation Agency, there is no longer a register of teachers.

Access to the teaching profession differs greatly between England, Wales and Scotland—and there are different qualification entry levels. The General Teaching Council for Scotland has an auto-recognition process for UK teachers who possess adequate qualifications for registration in Scotland. However, that does not mean that all teachers who teach in England or Wales can teach in Scotland. As such, teachers in Scotland should hold a qualification that is the equivalent of Scottish qualifications to enter the teaching profession in Scotland.

Teachers moving to Wales have to have equivalent standards. FE teachers, who are recognised by the National College for Teaching and Leadership in England and who are qualified to teach in England, are not recognised in Wales, and that means that they cannot be registered. Both Wales and Scotland have set different qualification levels to be able to work in the teaching profession.

There is an additional factor in Wales because of the bilingual nature of our education system. I know that noble Lords are aware that the Welsh language has equality status, and teachers have to be able to manage aspects of the school curriculum where they intersect with that language requirement. That does not mean that they have to speak Welsh, but they have to be able to manage aspects of the curriculum in English-medium schools.

Any flattening of qualification requirements would have a detrimental impact on the education provided in schools in Wales and Scotland and would dilute the standards that each country has set. I cannot think of any pressure to change these structures that has an impact on the internal market. The teaching profession should be excluded from this Bill as a result.

--- Later in debate ---

I am sure that the Minister will try to assure me that these examples would not be “caught”. That seems to be the standard response to real-world examples of how the Bill, if enacted, might be applied. I hope that I have demonstrated my point and I look forward to the Minister’s reply.

[Lord German (LD)]

My Lords, I happen to have spent 10 years of my life working on the mutual recognition of qualifications in Europe. I left that role and, 20 years after that, it was applied to about only four or five professions across Europe. Trying to understand where people are able to employ the appropriate skills, knowledge, understanding and practice in another surrounding is an amazingly complex area. That surrounding might have a different framework of regulation and perhaps a different framework of operation.

The intention to have mutual recognition of qualifications is fine, but the timing for putting it in place is not fine, because the Government want it to happen very rapidly. It seems to me that the most sensible way of doing this would be to try to work through the professions in relation to their activities, trying to make sure that, where there are barriers, those are reduced, or where there are barriers that are appropriate, they are not legislated for by accident in advance.

The noble Baroness, Lady Finlay, has already talked about the Welsh language. There is a very interesting debate to be had about professions that can or cannot operate through the medium of Welsh. It depends on the services being provided and on the context of where those services are provided. A profession operating in a context that is different in different parts of the United Kingdom will have different requirements because of the geography, culture or operation of the services that are to be provided. Therefore, my request to the Government is that they step back a little, take some time, concentrate on trying to fix the things that they can fix and, for goodness’ sake, allow this thing to mature properly before going in with legislation that will be doomed to failure in the end.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, on the next group I will explain that the drafting of some clauses of Part 3 is complex and not as straightforward as it could be. One way or another, it would be useful to have a statement clarifying whether the end result is the status quo, either as a general objective or for certain circumstances.

However, as the hour is late, and as I will elaborate a specific instance on Monday, I do not need to say any more, other than to support what has been said by my noble friends Lord Fox and Lord German. This appears to be a rather complex topic. Maybe taking time to sort it out and make sure that the drafting is as clear as possible would be a good exercise.

United Kingdom Internal Market Bill

Lord German Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

[Lord German (LD)]

It is a pleasure to follow the noble Lord, Lord Dunlop, and to echo many of the points he has just made, caution being one of them and care for the union another. I want to illustrate some of his points in what I have to say. I must declare my interest: I am Welsh and I live in a recipient area of huge amounts of European funding.

This part of the Bill is definitely a bolt-on: it has nothing to do with the operation of the internal market or with the four countries being able to trade freely together. This is about the replacement money for the EU funds—how it will be spent and by whom. Fortunately, I asked a question of the Minister in this very Chamber a few months ago about the European money that came to Wales. I was given a guarantee, which I am hopeful the Minister will repeat today, that the people of Wales will get, pound for pound, what the European funds gave them. That was the guarantee given in this Chamber by the Minister. If he wants to check, I can refer him to the relevant Hansard. The point I am making is this. It was not a question of the receipt of the money: I am pleased to bank the £2.2 billion that the European funds have given to the people of Mid and West Wales—that is two million people—over the last six years, but I am worried about how that money will be spent and what effects it will have. Effectively, this part of the Bill puts the cart before the horse. We have to agree a whole set of rules which cross devolved boundaries in ways we can only guess at, and nowhere are we given clear answers to fundamental questions about upholding and respecting the devolution settlements in the UK.

The implication in this part of the Bill is that it will have no impact on the functioning of the Barnett formula or on additionality, referred to by the noble Lord, Lord Dunlop. However, that is only an implication. Will the Minister give us today the answer to that fundamental question: will it have no impact on the normal functioning of the Barnett formula?

There has been no problem thus far with the UK Government seeking to spend money in Wales, in collaboration with the Welsh Government. Long may it continue, and I will encourage the Government. However, the key word is collaboration. Now, we are being asked to approve a law so broadly drawn that it will have a coach-and-horses effect on the powers of devolved Governments. I have to say to the Government that if it is not done collaboratively, spend does not necessarily mean approval. Approval will not automatically be given when the legal framework is in the hands of the devolved Governments. Factors such as planning approval, environmental impact assessments and curriculum development legislation all have a bearing here.

The Explanatory Memorandum implies that the UK Government will determine what moneys are available and how they are spent. The Welsh Government have had major control over the design and implementation of EU structural funds spent in Wales. For a few years, I had that responsibility in the Welsh Government. It is different, of course, for the smaller cross-EU programmes such as Erasmus and Lifelong Learning, which includes Comenius for school exchanges. These programmes were centrally designed but nevertheless locally administered.

United Kingdom Internal Market Bill

Lord German Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I will also speak to Amendment 50 in my name, which is also signed by the noble Lord, Lord German, to whom I am grateful for his support. Also in this group is Amendment 51, tabled by the Government, for which I thank the Minister. It is clear that the Government were listening during the debate in Committee, and I note that in the letter that the noble Lord circulated this afternoon to interested Peers he acknowledges the representations made by stakeholders on this issue. I can only express my appreciation that we have seen movement from the Government on this. This is also a demonstration of the usefulness of having a House of review.

I wish to thank the General Teaching Council for Scotland, as I did in Committee, for assisting me in the analysis particularly of the differences between the government amendment and those I had tabled. I also note and thank the noble Lord, Lord Foulkes of Cumnock, with whom I consulted about this matter, as a former chair of the education committee and a member of the General Teaching Council for Scotland. He empowered me to say that he supports the push to see that the full powers of the General Teaching Council for Scotland are retained. I wish, however, at the moment to retain the possibility of taking Amendments 37 and 50 to a vote, depending on the answers to two questions that I wish to put to the Minister, of which I have given him prior notice.

The first, and perhaps the most crucial one of all, is about the word “school” in the Government’s amendment. I remind noble Lords that government Amendment 51A says that the mutual recognition provisions do not apply to “school teaching”. Could the Government confirm that they intend that this will be interpreted in a broad sense, so that it encapsulates any educational institution in which teaching is delivered? The original amendments, Amendments 37 and 50, refer to the “teaching profession”, which obviously has a potentially broader scope.

I note also that the Minister’s letter circulated to Peers says that the Government have tabled an amendment to remove the teaching profession from the recognition provisions. Clearly, “the teaching profession” and “school teaching” are not necessarily the same thing, and I think it is crucial that we make this very clear. I am not a lawyer, but I doubt that a letter from the Minister to Members of your Lordships’ House has a huge amount of legal standing. I think we need to get on the record precisely what the government amendment means.

The second question is perhaps more technical, and that is a remaining question about the application of the mutual recognition principle and the scope of the exclusions in Schedule 2 Part 1. I seek confirmation from the Minister that the above exemption would not be restricted by the provision in Schedule 2 covering:

“Services provided by a person exercising functions of a public nature or by a person acting on behalf of such a person in connection with the exercise of functions of a public nature”.


Teaching in local authority schools, which would constitute a service provided by a person exercising a public function, would appear to be covered by that. But, obviously, education and teaching extend far beyond that. In particular, what about teaching in independent schools? Teaching is not solely carried out in a public service context, which casts doubt on how the exclusion applies in the context of teaching services as a whole.

Given that the General Teaching Council for Scotland register is not employment based and that the GTCS has no role whatsoever in where a registered teacher ultimately becomes employed—indeed, this often changes over the course of registration—it is important to know that the Government’s intention, and the effect of the law, is to cover all of these elements.

I have focused here particularly on the Scottish case, and I believe the noble Lord, Lord German, will address Welsh issues in particular, but I hope that the Government have also taken full account of the particular situation of Northern Ireland and the teaching profession there.

Finally, I would like to ask a somewhat broader question of the Minister. In Committee, I noted that it would appear that there are also issues potentially with other professions, particularly social work—but there may well be others. I ask the Minister to confirm that the Government have fully consulted with all the professions which may have different arrangements—sometimes long-term, continuing arrangements—in the devolved nations regarding registration or qualification requirements. If the Minister is not able to answer now, perhaps he could write to me about that question.

I note the comments made in the last group by the noble Lord, Lord Stevenson of Balmacara. We are, at this stage of the Bill, still left with very considerable uncertainties and concerns and a real lack of clarity, which has to be a worry given the importance of the Bill and these issues and the pressing nature of the deadline approaching us. I beg to move.

[Lord German (LD)]

My Lords, I rise to support Amendments 37 and 50 and slightly to push the point that the noble Baroness, Lady Bennett, just mentioned, that the words “teaching profession” appear in a letter which was circulated to colleagues in the House of Lords today but the words “school teaching” are used in the amendment. People who teach in further education colleges are called teachers or lecturers, but teaching is what they do. In fact, sometimes they are called teachers in universities as well. That clarification is needed, but at the moment we clearly have two separate terms. I recognise that the Government have moved in this direction and are thinking about this issue following representations made to them, and I welcome that.

However, there is a problem with the words “school teaching” only. I consulted the Education Workforce Council, which has responsibility for the registration of teachers in Wales. It registers petitioners in seven workforce categories across four settings: schools, further education, work-based learning, and youth work. While there are no minimum qualifications for further education staff in Wales as part of EWC registration at present, that might change. In England, there is no registration system for further education staff or any minimum qualifications. It might therefore be that this is not future-proofed in this legislation, where further education might well become a regulated profession as in other forms of education.

The other issue that comes out of this is the four settings that the Welsh council regulates. I would like to ask the Minister about youth work. If you are a registered professional working in youth and it is requirement for you to be registered if you are to be in this area, is that included in the government amendment which refers to “school teaching”? The definition of “teaching” and “school” is quite wide.

I would like the Minister to have a look at the common framework in this area because there is already a mutual recognition of professional qualifications common framework. I would be grateful if she could update the House on how that common framework is progressing. If it is progressing and it is part of the common framework procedure on which we have already passed an amendment, clearly it will make a substantial change to this section of the Bill as well. The principle of automatic recognition imposed under the Bill may well prevent Welsh Ministers, for example, regulating in future on professionals qualified elsewhere in the UK who have lower qualifications or standards than those which would be required in Wales.

Finally, I turn to an issue which has come out of this discussion. Social care is also an area where there are professions. Social care regulation in Wales is also undertaken by a separate regulator. It is one of its primary functions. Under the Regulation and Inspection of Social Care (Wales) Act 2016, from 2022 a range of social care professions will be mandated by the Welsh Government. In other words, you will not be able to operate as, for example, an adoption service manager, a fostering service manager, a residential family centre manager or an adult care home worker unless you have had your registration approved by Social Care Wales.

United Kingdom Internal Market Bill

Lord German Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[Lord German (LD)]

My Lords, I am grateful to the noble and learned Lord, Lord Thomas of Cwmgiedd, for putting forward so much detail behind this amendment, which clearly lays out the course of action that could be dealt with and also talks about the way the Government propose to take these matters forward. I think that my job is to amplify some of his points and perhaps to extend them as well. I refer to the offer from the Welsh Government, which I presume has also been made by the Scottish Government at the same time: that was the indication I received last night, and perhaps the Minister could confirm that this letter from Scotland has been received as well.

This clause proposes a major recentralisation of power. It is a far cry, for those of us who live in Wales, Scotland or Northern Ireland, from the cry of bringing back our laws, because state aid is currently not a reserved power, despite the Government’s protestation that it is and always has been. Annexe 1 of the Explanatory Notes for the Bill clearly lays out that it is not a reserved matter, but the Bill, of course, makes it say so. I reiterate at the start that we on these Benches want to see a single state aid regime for the whole United Kingdom, but that regime has to be to a design on which all four parts of the United Kingdom have collaborated. If they are not prepared to do this, as this clause lays out, they will not get a legislative consent Motion from either of the devolved Parliaments or from the Northern Ireland Assembly. In fact, in his letter to the Secretary of State for BEIS yesterday, the Counsel General for Wales said:

“Even if we resolve all the other issues, this alone”—


that is, this clause—

“would make it impossible for me to recommend legislative consent to the Bill as it now stands.”

That is crucial, because it says something about the relationship that this clause makes between the four nations of this United Kingdom. It is not a way to respect our devolution settlement and, importantly, not a way to respect the union we have within the United Kingdom.

EU state aid policy is established through the Treaty on the Functioning of the European Union, and directly applicable regulations following on from that treaty. That was in place of having directives that would have required us to transpose these matters into UK law. In response to the House of Lords report on state aid, the Government said:

“We note that in practice the existing EU rules have always been sufficiently flexible to allow the UK to make innovative aid interventions when necessary.”


So the Government do not believe that there has been a problem in the way that this operated with the EU, and now they are intent on eating their own words, bringing back the rules, converting them into a straitjacket regime and not providing the flexibility that the countries in our union previously enjoyed. They also add that it would be “harmful” if this were dealt with in any other way.

A more co-operative and consensual approach is needed. The clause we are seeking to remove assumes that divergence will happen, and decrees that there shall be no divergence. Blunting and reducing the power of the devolved authorities is deemed to be a price worth paying so that the UK Government alone can determine the route they wish to follow in directing the new regime. Yet we do not know what this regime will look like. There is no sign of the detail or the choices the Government propose to take.

What this clause does, no matter what consultation the Government may eventually engage in, is drive their own agenda—an agenda that primarily has to support England. That, by the way, is no way to provide business with the certainty it is seeking. In fact, the lack of clarity at this stage prolongs the uncertainty; but it need not be like this.

We need to make progress on a UK framework for subsidy control. Again, this is another framework agreement which needs to be put in place. At the moment, without such a framework, it could easily be said that the Government are making it up as they go along. What is needed is a dialogue, not the “take it or leave it” policy that this clause entails—a policy which may well end up in the courts and will certainly amplify the feeling that the union of the United Kingdom is not respected.

Yesterday’s letter from the Welsh Government’s Counsel General, which the noble and learned Lord, Lord Thomas of Cwmgiedd, referred to, provides the UK Government with a route to a sensible solution. It recognises the ability in the EU to have variance in subsidies where there is an identified need. I must point out to noble Lords that many of us will remember that this was the case before we became members of the EU. I remember the arguments and debates on UK regional aid and regional assistance, and dividing the areas of the country up where aid could be given in greater amounts. That historical message was that there would be differences and distortions; of course, subsidies provide distortions, but they were provided for very good reasons. They were proposing to make a difference where the needs were greatest—where poverty and economic need were greatest—and so it was provided it in that way.

I can say, as somebody who had to operate within that framework as an economic development Minister, having to talk about these matters with Brussels simply to identify the boundaries, the flexibility, as the UK Government themselves say, was great indeed to manage that work. I believe we are seeing this clause put the cart before the horse—devising the policy before putting the legislation in place is what we are looking for, and that is what this amendment does.

All the devolved Governments have made it clear that they are prepared to work at pace with the UK Government to design a new subsidy regime. I would be grateful if the Minister in replying could tell us how the Government will respond to the offer from the devolved Governments. I also note that there must be unease on the Government’s side about this clause, since I have noticed that no other speaker, apart from the Minister, has come forward to support it.

Removing this clause from the Bill provides the opportunity for dialogue and the drawing up of a new subsidy regime for the UK. As the noble and learned Lord, Lord Thomas of Cwmgiedd, said, we already have a replacement in place temporarily until that is put back and the regime determined. I do hope that the Government will accept the offer from the devolved Governments as the right way forward and, as a gesture of good will, I would be grateful if they would therefore consider withdrawing this clause, supporting this amendment and, in so doing, strengthening the relationships between the various parts of our union.

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, I speak in support of this amendment, elegantly explained by my noble and learned friend Lord Thomas of Cwmgiedd. I am pleased to follow the noble Lord, Lord German, who amplified his points.

Yesterday, as already referred to, the Welsh Government’s Counsel General wrote to the Secretary of State at BEIS about Clause 44. That letter demonstrates clearly that the Welsh Government are seriously committed to trying to save the union of the United Kingdom and recognise the need to secure the internal market. Their offer to work intensively with the Government is clear and unequivocal.

The Welsh Government have consistently put forward imaginative and thoughtful proposals about how to move the constitutional debate forward. Indeed, in Brexit and Devolution in June 2017, the Welsh Government championed the idea of common frameworks, subsequently taken up by Whitehall. If I may quote, they said:

“From the outset of the debate about our collective future outside the EU, the Welsh Government has recognised a need to develop UK frameworks. It is clearly important that no new barriers to the effective free movement of goods and services within the UK are created as a result of EU withdrawal. The development of UK frameworks should be taken forward immediately on the basis of negotiation and agreement among the four UK administrations.”


This paper suggests a qualified majority voting system within a reformed intergovernmental system, where a decision endorsed by the UK Government plus one of the devolved Governments would be sufficient to break any logjam, thus addressing head on the issue of one nation wielding a veto. Last year, the Welsh Government’s comprehensive analysis in Reforming our Union championed shared governance, describing taking responsibility for codesigning legislation and policy where devolved and reserved competences intersect. It asserted that

“devolution is concerned with how the UK as a whole should be governed, with proper account taken of the interests of all of its parts. It is a joint project between England, Wales, Scotland and Northern Ireland, based on a recognition of our mutual inter-dependence, which therefore requires a degree of shared governance.”

It foregrounded common frameworks, seeking a common approach, shared delivery systems and joint governance arrangements that should be developed on a collaborative and consensual basis. So, the intervention from the Counsel General is not an opportunistic response to this Bill but the continuation of a patient, crystal clear commitment to common frameworks at the heart of intergovernmental relations.

Over these three days of debates, Members across the House have recognised the importance of these frameworks. The Welsh Government and, I believe, the Scottish Government are not arguing to be left alone to design and implement their own rulebooks for government subsidies. They would be mad to do so. In a free-for-all between Governments of these islands to attract and hold on to investment, the UK Government would be bound to win, because they have much more significant financial resources and can set their own budget. Rather than arguing to have an equal role in designing a fair system all can work within, they are committing to do this on a timetable compatible with the one the Government have set themselves and to take no legislative action in this space until at least autumn 2021.

This is surely beyond reasonable doubt. If the efforts to reach agreement fail, the Government will have to introduce primary legislation to define the new subsidy regime, subject to the same constraints there are now, in order to achieve a coherent regime. We have repeatedly been told that this Bill does not diminish the powers of the devolved institutions, yet all we see and hear defies that. This clause explicitly and openly alters the devolution settlement by adding to the list of reserved matters in the Government of Wales Act and the other devolution statutes. I therefore urge your Lordships to support its removal from the Bill.