United Kingdom Internal Market Bill

Lord True Excerpts

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

The noble and learned Lord, Lord Mackay of Clashfern, suggests this method in Amendment 171. At the moment, I have been persuaded that the suggestion that the common frameworks process be recognised in the Bill looks more attractive. Could the Minister indicate the Government’s position on Amendment 171 and on whether the common frameworks process should be recognised in the Bill? That would definitely provide a solution.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, it gives me great pleasure to seek to reply to this extremely interesting debate. I agree with the noble and learned Lord that this is an extremely important area to consider. There were times in the speech of my noble friend the Duke of Montrose when I reflected that I was probably the 14th Mr True in the context of this discussion. I pay tribute to his ancestors for their long service to the Crown and the country of Scotland. It is true that the Act of Union is still of fundamental importance.

I am extremely grateful, as always, to my noble and learned friend Lord Mackay of Clashfern. Everybody who spoke recognised the good, unionist motivation to seek conciliation and collaboration which lay behind his amendments. I think that was shared by even my noble friend Lord Naseby. Often in debate we are asked to measure quantity and quality; although my noble friend was alone until now in saying that these amendments were perhaps not right for the Bill, I welcome his support.

Turning to the speech and proposals from my noble and learned friend, his Amendments 114, 141 and 171 seek to place obligations on the Joint Ministerial Committee on EU Negotiations—my noble and learned friend suggests this should be the core body—to be consulted on a number of considerations relating to the operation of the internal market.

I have been asked about the work of intergovernmental operations. The JMC (EN), which is the subject of these amendments, is a sub-committee chaired by my right honourable friend the Chancellor of the Duchy of Lancaster. It meets at regular intervals to facilitate political engagement between the UK Government and the devolved Administrations on the outcome of the UK’s exit from the EU, of which this Bill is one consequence. In total, since 2016, it has met 25 times, including the meeting that took place on 3 September 2020. The JMC system provides central co-ordination for the IGR machinery. I will come back to that later.

Before I address the amendments individually, I stress that the Government agree that the internal market should be underpinned by an effective system of governance and consultation between the four Administrations of the United Kingdom. However, we argue that the Joint Ministerial Committee on EU Negotiations is not the most appropriate or effective intergovernmental structure to engage on such technical considerations. As I mentioned, it was established in 2016 and has been valuable since then; it involves Ministers from each Administration.

I say with all respect to the noble Lord, Lord Purvis of Tweed, that there is no antithesis in regretting—as I hope he does—the decision of the Scottish Administration to withdraw from internal market discussions last March, as I referred to in a recent speech in your Lordships’ House, while seeking to continue co-operative work in the broad area of intergovernmental relations and through the common frameworks process. I will return shortly to the points on that made by the noble and learned Lord, Lord Falconer. The United Kingdom Government seek co-operation and understanding between the different Administrations. We want effective governance and consultation.

Through the review of intergovernmental relations, which is going on at the moment, as your Lordships are aware, we are working together with the devolved Administrations to revise and update the existing JMC system. Good progress is being made and we look forward to reporting on our finalised governance and parliamentary reporting structures in due course. As such, it would be counterproductive to pre-empt the conclusion of the review of intergovernmental machinery and place these obligations on the existing Joint Ministerial Committee, which would perhaps not be the most appropriate forum.

The noble and learned Lord, Lord Falconer, asked how disputes relating to the internal market should be resolved. Where disagreements relate to the internal market impacts of specific regulations that fall under a common framework policy area, it is anticipated that they will be considered through the dispute resolution mechanisms for individual common frameworks. The Government remain committed to resolving issues, including those relating to the UK internal market, at the lowest possible level. Most conversations on the UK internal market should therefore take place at departmental level to consider the impact on the UK internal market of individual policies at the technical level. This will be done through increased and improved engagement across all UK government departments and their devolved Administration counterparts. The proposal for reforming the formal process for avoiding and resolving intergovernmental disputes was jointly drafted by officials from all Administrations and endorsed by Ministers.

The UK Government are committed to the principle of dispute avoidance, as all Administrations continue to work closely behind the scenes to resolve issues through constructive dialogue, rather than detailed procedure. In the past, differences rarely escalated into disputes—in only four instances, I am informed. We can therefore expect the principle of dispute avoidance to remain central to managing disputes in the future.

My noble and learned friend suggested a specific function for the JMC (EN) on these issues. Amendment 114 requires that the committee be consulted prior to a task group of the Competition and Markets Authority being set up. We have already written into the Bill, in paragraph 2(3) of Schedule 3, that the Secretary of State will consult devolved Administrations prior to the appointment of panel members to the office for the internal market. The noble Lord, Lord Purvis of Tweed, referred to this. He said that it is just appointing the panel members but, in appointing members to a panel, it stands to reason that the devolved Administrations, being consulted, will be aware of the purpose for which that panel is being created.

In addition, we need to think carefully before compromising the independence of the CMA. The CMA is an independent non-ministerial department with a global reputation, as my noble friend Lord Callanan argued on an earlier group. Ministers have no day-to-day involvement in its operations. So that the advice and outcomes of the OIM’s work is trusted, its advice and future panels must be seen as impartial. There can be no suggestion of political interference, at any point. The involvement of a political engagement forum would therefore not be appropriate, in our judgment.

Amendment 141 then requires that all periodic reports by the office for the internal market on the operation of the UK internal market are laid before the JMC (EN). Subject to Clause 31(7) and Clause 34(3)— which the noble and learned Lord, Lord Falconer, pointed out, are governed by Clause 30(1)—the OIM will lay reports to the UK Parliament and each of the devolved legislatures. It will be for the relevant Administrations and legislatures, which receive the reports, to determine the most appropriate course of action, rather than a committee such as the JMC (EN).

Finally, Amendment 171 places an obligation on UK Ministers to bring regulations proposed under powers in the Bill to the JMC (EN). It suggests that, in the absence of agreement, UK Ministers would be obliged to lay reasons for the failure to agree before both Houses of Parliament and to table a Motion for a debate on the proposed regulations and the disagreement. I understand why my noble and learned friend is searching us on this point, but this mechanism is likely to introduce considerable delay in the implementation of policy to protect the internal market. Such a process would not facilitate timely discussions, given the frequency of such JMC (EN) meetings, and could undermine Parliament’s responsibility to legislate for the internal market as a whole.

I do not normally like to go with technical objections to amendments, but this amendment, as well as creating a new procedure for all powers across the Bill, would change the way regulations are made for Northern Ireland. It would require all the devolved Administrations to consent to regulations for Northern Ireland. Even if my noble and learned friend were minded to go forward on this route, and I hope he is not, we would have to respect the particular regulating arrangements for Northern Ireland in the Bill.

In summary, I hope noble Lords agree that, although these matters are important—I do not resile from the importance of the considerations raised and I will reflect on the debate—there are clear limitations to using the JMC (EN) in this capacity, particularly for measures relating to the office for the internal market, where there are already provisions in place to report directly to the Senedd, Holyrood and Stormont. With this in mind, I ask that this amendment be withdrawn.

--- Later in debate ---

[Lord Fox (LD)]

I appreciate the Minister’s reply on the important points put forward. Whether the amendments of the noble and learned Lord, Lord Mackay, are adopted or there is some other form of regulating the relationship between the UK Government and the devolved authorities, does the Minister agree that there can be a smooth-running internal market only if there is trust between the UK Government and the devolved authorities? Could the Minister say what the Government’s assessment is of the effect on that trust of publishing the Bill?

[Lord True (Con)]

My Lords, I strongly agree on the principle of trust between all parties in a negotiation. It is not always there in every negotiation, but this is more than a negotiation; it is a relationship. It is a life together, which we all wish to carry forward as the four nations and peoples of these islands. Standing at this Dispatch Box, I have sought to assure the House of the Government’s total commitment to proceeding with trust and respect. That has to come from every Government and institution in the United Kingdom. I go no further than that. I do not believe that seeking to set out a common approach to the management of the UK internal market in the UK Parliament, to which all four nations of this kingdom send representatives, should in any way undermine trust.

[Lord Purvis of Tweed (LD)]

My Lords, can the Minister confirm that the discussions of the intergovernmental review, the conclusions of which we are asked to await, will specifically cover the operation of internal market legislation? Until now, as the Minister knows, legislative consent has been denied by both Wales and Scotland. The Minister repeated today that he regretted that the devolved Administration of Scotland has walked away from single market considerations. Will the intergovernmental fora that were referred to specifically cover the internal market?

Secondly, in their joint letter to my noble friend Lord Fox, the noble Lord, Lord Stevenson, and me, the Minister and the noble Lord, Lord Callanan, stated that the office for the internal market will have a role in providing independent advice in the dispute resolution process. With regard to the devolved Administrations in the intergovernmental fora, has it been confirmed that the OIM will have a role in dispute resolution?

[Lord True (Con)]

My Lords, I believe I heard my noble friend Lord Callanan addressing this point in the previous group and that there was talk of a letter. I may have misheard but, if such a letter were proposed, I would not want to interpose my rather excessively considerable body between my noble friend’s pen and your Lordships’ House. But I take the point. If it is not covered in the response that my noble friend Lord Callanan has promised, I will address it. I am not pleading for an institutional parsing of the text in my comments, but I repeat that we are jointly exploring a number of options to strengthen the impartiality of the intergovernmental dispute resolution process. We hope it can be carried forward successfully.

[Lord Mackay of Clashfern (Con) [V]]

My Lords, I am grateful for the general support for my proposal to require co-operation between the devolved Administrations and the UK Parliament. I am sorry that my good friend, my noble friend Lord Naseby, does not care for it. I am not sure why that is, because I do not think that what I am proposing would damage in any way the independence of those seeking to set up a task force. All I am concerned about is that the task force should be familiar with the various areas of the United Kingdom that will be affected by the dispute in question. However, I have to be thankful for the support of your Lordships for the general principles that I am trying to further.

I am using the JMC (EN) because I understand that, at the moment, it is the body that is running the common frameworks policy. I want to make it absolutely clear that I am strongly supportive of the common frameworks policy and of bringing together in that connection various important matters. The system seems to work well. I am happy to use any organisation that the Government come out with for continuing that work with a degree of friendship.

I indicated in my speech at Second Reading that although the Scottish Government had stood apart from the situation in a formal way, they were apparently encouraging support for trying to resolve the main problems of the internal market in the common frameworks policy. As far as I can make out, that is the position. Needless to say, I got that information from the Scottish Government. It is a description of our situation which shows a certain degree of separation and co-operation at the same time; I very much welcome that co-operation.

The general point of who will eventually run this is a matter that I cannot anticipate. Therefore, when I use the JMC (EN) in my amendments, I am simply using what I understand is the present situation. The Government may well be able to produce a better system and, if they do so, I will be glad of that. In the meantime, I think that there is general acceptance of the view that the devolved Administrations need to be closely involved. After all, in Scotland at least there is a very strong interest in this, because something like 60% of its exports go to the rest of the United Kingdom. An internal market that functions properly and fairly is very much in Scottish interests, and I certainly would like to do everything I can to promote that.

In the light of the very good response I have had from my noble friend Lord True, I am happy to withdraw my amendment.