United Kingdom Internal Market Bill

Lord Liddle Excerpts

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

[Lord Liddle (Lab)]

My Lords, this is a very interesting debate to join. It is a pleasure to welcome the noble Lord, Lord Callanan, to his place, as it were, once again defending an extremely complex and difficult piece of legislation. I hope he will give pretty comprehensive answers to the points raised by my noble friend Lord Rooker, the noble and learned Lord, Lord Hope of Craighead, and the noble Lords, Lord Purvis and Lord Inglewood, because they all had great merit.

I spoke at Second Reading but was not able to attend the first day of Committee because of commitments in Cumbria. In all the furore about the unconstitutional and completely unacceptable clauses of the Bill, the Government have got away with the rest of it, which may not be unconstitutional but is certainly unacceptable. Therefore, this House should expose it to very critical scrutiny.

We need clarification—this is where my noble friend Lady Hayter’s amendment is so important—in very simple and clear language of what the Government mean by mutual recognition and how this will work out. The idea of mutual recognition was an important foundational principle in the history of the European Union and the single market, but only because mutual recognition without anything else is a weapon that results in a race to the bottom. In the single market White Paper put forward by Jacques Delors in the early 1980s, the whole point was that you had to have common standards and harmonisation in a list of certain areas—I think there were 300—to go alongside the principle of mutual recognition.

I have two points to make on this. First, on the position of the devolved authorities and the nations of Britain, do the Government recognise that an essential principle of devolution is that diversity and experimentation are good things, and that it is therefore important that in a devolved settlement the devolved nations should be able to experiment with setting standards in the areas of public health, environment and consumers? This is part of the point of devolution. It is not something the UK Government should seek to prevent. It is very important that the Government make clear their support for the principle of devolution and diversity.

My second general point is the one to which the noble and learned Lord, Lord Hope, drew attention in his support for my noble friend Lady Hayter’s probing amendment: why do the Government include in their general principle this business of goods being imported into the United Kingdom? Does this essentially tell the devolved Administrations that, in any trade agreement that the UK Government negotiate, they will have no say over the standard of goods coming into the UK and would have to accept them whatever they thought about their compatibility with their own aspirations to set standards? That seems to me a fundamental point that needs an answer. This legislation is deeply complex, but we need clarity from the Government on fundamental points.

[Lord Fox (LD)]

My Lords, this has been a relatively short debate in terms of the Bill so far, but it has raised some fundamental issues which beg some quite deep and considered answers from the Minister.

When the noble Lord, Lord Inglewood, brought up Cumbrian cattle-driving and we had the noble Lord, Lord Liddle, to follow, I felt we might have had quite a long discussion around that, although we did not. The noble Lord, Lord Inglewood, in characterising Defra as an English department, brought out the Janus face Secretaries of State have in being not only Secretary of State for the United Kingdom but in most cases also Secretary of State for England. Herein lie some of our problems and uncertainties.

The noble Baroness, Lady Hayter, set out and explained very well the issues surrounding mutual recognition. In the noble Lord, Lord Rooker, this House has the benefit of someone with fantastic knowledge and it is important to listen to him. Animal feed is an important area, although it is not always clear. If I may beg your Lordships’ indulgence for a short anecdote, in the mid-1970s our farm was subject to one of the small outbreaks of anthrax, which is very rare—I found the animal that died of it, and it was not a pretty sight. We were put into quarantine—something like lockdown—and it was tracked down to the importation of cheap beans from India. That is why the control of animal food in this country is really important.

In terms of animal feed on the island of Ireland, I was struck that the Government have already exempted the electricity market there—the Minister and I debated this on a statutory instrument—from the overall UK market. They have done that because of the integrated nature of electricity on the island of Ireland; it is an entirely sensible move, of which we approve. It seems to me that animal feed is very similarly integrated and would benefit from a similar island-of-Ireland-wide process. The Minister might like to think about that going forward.

As usual, the noble Baroness, Lady McIntosh, asked a series of excellent and important questions. We need answers to them to understand the objectives of the Bill.

In Amendment 21, the noble Baroness, Lady Finlay, seeks what I think many of us seek to do: to look at this, as somebody mentioned, through the other end of the telescope. This is turning things upside down. Why do we not start with the common frameworks and what is currently working around the devolved authorities and legislate only what needs to be done to create the market we all want? My noble friend Lord German’s twin-track, two-road approach is a very good example. Where is the gap? How do these twin tracks come together? There is no explanation anywhere of how the common frameworks and the Bill are supposed to work together. The only conclusion I can draw is that the common frameworks are allowed somehow to dwindle, because the Government seem to be putting an enormous amount of energy into the Bill.

As usual, the noble Baroness, Lady Noakes, is right: we need to facilitate trade and make it as frictionless as possible across the UK. It is a shame we cannot make it frictionless across the whole of the European Union. The fact is, we have devolution, and the internal market Bill must respect that. At present, it seems that it does not. The noble and learned Lord, Lord Hope, made this point very ably.

As usual, my noble friend Lord Purvis came up with a series of important questions, including Scotch whisky-based ones. He came up with the revelation that there is a complete and absolute internal contradiction in the Bill. The Government brought forward an amendment that causes the following to happen: if England decided to set up its own approval system and started approving active chemicals banned in the EU, Scotland could refuse them. Conversely, Scotland could presumably go further than the EU ban and ban substances which England approved. That is the Government’s position, based on an amendment they brought to the Commons. However, he Minister has said that we must stop this happening, and that the Bill will do that. Something is not right, and the Minister needs to explain what is wrong.

The telling point made by my noble friend Lord Purvis and other noble Lords, including the noble Baroness, Lady McIntosh, is that without clear definitions, it will not be the Government causing the race to the bottom—it will be companies taking this to the courts. That is why we expect from the Minister a very detailed answer to these important questions.

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[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am interested to know why the Minister felt that these amendments needed to be moved at this time; what provoked that? Furthermore, who decides—and in what circumstances—what is a hypothetical sale, as opposed to a real sale?

[Lord Liddle (Lab)]

I have no wish to add to the general confusion.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the Minister for clearing this up, because any confusion beforehand may be ongoing. Since he was so clear, perhaps he will not mind my asking a couple more questions.

As the Committee knows, I live on the border, and some of these things are very relevant for traders, especially rural traders living on either side of the border. When I was a Member of the Scottish Parliament, one of the big areas of debate when minimum unit pricing was introduced was the concern about the cross-border selling of alcohol, which avoided the decision being made in Scotland concerning the price of that alcohol. This is not hypothetical; these were real sales. It did not apply to the more expensive malt whiskies et cetera. The minimum unit pricing of alcohol was, by and large, about the low-value alcohol which could be brought across the border in large quantities to be sold in Scotland. That was a valid issue, and a key area of consideration when it was debated by the European court. The justification, which the ability of the public authorities to prevent that happening relied on, was that this was against market access principles but justified on public health grounds. The Government have chosen not to do this, so they will be relying on the market access principles.

Can the Minister clarify something that I genuinely do not know? I am not trying to catch him off guard. On the sale areas of goods, does the Bill permit alcohol for use within Scotland to be sold in Scotland on English grounds? Can alcohol be sold in Scotland by using mutual recognition, to avoid the minimum unit price stipulated for alcohol that is then sold in Scotland? I have a fear that it may be. It will be reassuring if the Minister indicates that this is not the case, because Clause 13 is about the sale of goods complying with local law and states:

“Nothing in this Part prevents goods produced in or imported into a part of the United Kingdom from being sold in another part of the United Kingdom if … the sale complies with any requirements applicable in that other part of the United Kingdom”.


Therefore, if we say that, rather than biscuits, it is gin or vodka, and a policy has a direct impact on the price of that gin or vodka because of the Scottish legislation, then Clause 13 suggests that if that alcohol was brought over from Northumberland and sold in the borders, the selling of it to a wholesaler within the borders would have to be done as if it had taken place in Berwick, Northumberland.

I ask this because there is currently a lot of cross-border trade in agricultural business. Many Scottish producers will sell livestock at the Wooler market in England. A lot of this is happening. It has been worked through with regard to the different agricultural standards. Therefore, I am anxious that Clause 13 could inadvertently be used to bypass what are correct elements.

This leads me to my final question. We will come to the definition of “goods” and “sale” with Amendments 66 and 67, but there is nothing in the definition of “sale”, or the other parts of the Bill, relating to the price. If policies are in place which directly impact on the price of an item to be sold, rather than standards, labelling or marketing, is price also considered within that? I would be very grateful and give him top marks if the Minister can answer those questions clearly.

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[Lord Liddle (Lab)]

My Lords, we have heard many excellent speeches in this short debate, and I agree in particular with what my noble friend Lady Andrews has said.

I am a member of the Secondary Legislation Scrutiny Committee. The committee shares many of the concerns expressed by the Delegated Powers Committee in its report. However, I would somewhat disagree with the strictures of the noble Lord, Lord Thomas of Gresford, on the behaviour of Her Majesty’s loyal Opposition. We have to be considered and careful about using fatal Motions, but to my knowledge it is certainly not Labour’s position that those fatal powers should never be used.

On the substance of the Trade Bill, the Agriculture Bill and the immigration Bill, I had assumed that the Government are putting extensive delegated powers into the legislation basically because they do not know what their post-Brexit policy is going to be—they do not really have a clue. For instance, they do not have a clue about what national strategy we are going to pursue on trade. Will it be one that maintains our high standards, or will it be one that tries desperately to get trade agreements with the rest of the world that lower standards in order to open markets in the hope that that will compensate for the loss of market access in Europe? I think that the Government do not know. There are deep divisions inside the Conservative Party on where the Government should go on these questions, so the simple thing to do is to put a lot of these policy decisions into delegated powers which Ministers will have to decide on at some future point.

However, in this Bill, I am concerned for a quite different reason: in this case the Government know only too well, in particular on the clauses on the Northern Ireland protocol, what they want to do with the powers that they would have. If we cannot remove those offending Northern Ireland clauses from this Bill, then if delegated legislation comes to this House based on them, we should vote against it every single time, because that is clearly unconstitutional and it would be perfectly within the powers of this House so to do.

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[Lord Hain (Lab) [V]]

Thank you, my Lords. I suddenly expired by unilateral mute for reasons that neither the broadcasting hub nor I could understand. I was about to complete what I said so, with the leave of the Committee, I will briefly do so.

The Bill will also narrow the territorial scope of devolved legislation. Regulations relating to goods passed by the Senedd, for example, will apply only to goods produced in Wales or imported directly into Wales from outside the UK. They will not apply to goods imported from the rest of the UK. This, as acknowledged by BEIS’s impact assessment of the Bill, would reduce the ability of local legislatures to pursue targeted social and environmental objectives so that the intended societal benefits “would be forgone”.

It is therefore clear that the market access principles of mutual recognition and non-discrimination set out in the Bill would present a significant threat to the purposes of devolution, which have been democratically established now for nearly two decades. Surely it is not too much to ask that, at the very least, the devolved Administrations should be consulted and their consent sought on the relevant measures in this Bill, as set out in these amendments?

[Lord Liddle (Lab)]

My Lords, there have been many excellent speeches in this debate and I doubt that I have anything much to add.

I commend to the Government that they take note of what was said by the noble and learned Lord, Lord Mackay of Clashfern. This is potentially a critical issue for the future of the United Kingdom. I want to see a United Kingdom survive; I am a passionate supporter of that. That means we must have a well-functioning internal market. However, the Government are making a great meal of this issue, building it up into a much bigger conflict than it needs to be. I urge them to follow the route of reviving and working through the common frameworks that I remember David Lidington proposed as part of the European Union (Withdrawal) Act. I do not see why this new Conservative Government have apparently abandoned the approach that David Lidington took then and are seeking to create a confrontation between the principle of consultation, which they favour, and the principle of consent favoured by the devolved Administrations.

The present Government seem to see Brexit as an opportunity for the assertion of the UK as a unitary state. This is very dangerous for the UK’s future. Take, for example, the structural funds, which play an important part in the Welsh and Scottish economies. Under the devolution settlement, the devolved Administrations were responsible for how structural fund money was spent in their areas. This Government are trying to take that away, establishing new powers to direct investment in Scotland and Wales. The Government are trying to reassert a unitary state. This is the wrong path to be following.

The person I think speaks the most sense on these questions is former Prime Minister Gordon Brown. I want to see us evolving in a federal direction and we cannot do that if we are going to tear up principles that have already been agreed. We are on the verge of making the mistake that the Conservative Party made in the 1880s when it rejected Gladstone’s visionary plan for Irish home rule and we will pay very heavily for the consequences.