United Kingdom Internal Market Bill

Lord Vaux of Harrowden Excerpts

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

If noble Lords and the devolved Administrations believe in the union, they ought to believe that we want an effective and efficient internal market within the UK. The issue should be, how best we can get that. For that reason, I support Clause 51, which ensures that this can continue to be a UK issue and cannot be overridden by the legislation in the devolved Administrations. We know that the Scottish Government do not believe in the union; they will find any way to undermine such a provision. I hope noble Lords will not let their version of grievance politics poison our approach to getting a sensible Bill on to the statute book to give the certainty that business needs.

[Lord Vaux of Harrowden (CB) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Noakes, and for once find myself in agreement with much of what she said. In his winding-up speech at Second Reading, the Minister said:

“Under our proposals, the devolved Administrations will continue to have power to regulate within devolved areas, in so far as these do not cause a barrier to internal trade.”—[Official Report, 20/10/20; col. 1426.]


The noble Lord, Lord Callanan, has repeated the same point today. Well yes, the devolved Administrations will be able to continue to regulate, but those regulations will become effectively meaningless if they can be undermined by unfettered market access from other parts of the United Kingdom. The Minister seems unwilling to address that simple point. Within the EU single market the devolved nations have enjoyed a level of discretion to diverge within a wider framework of agreed standards. Despite that divergence, our internal market has operated smoothly, and I do not think that many would argue otherwise.

Like it or not, devolution is a fact and we cannot and should not back-pedal on it. The Government recognised that in the frameworks agreement when they agreed that the common frameworks should

“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules”.

Can the Minister please confirm that the Government still stand by that agreement, in spirit as well as letter?

This Bill is a blunt instrument which effectively removes that flexibility for tailoring policies. What would be the point in, for example, the Welsh Government legislating against single-use plastics, if they are unable to block such items coming in from other parts of the UK; or of Scotland tightening labelling requirements, if goods sold in Scotland from other parts of the UK do not need to follow those requirements? Does the Minister seriously argue that those kinds of actions have created or would create significant barriers to internal trade?

The common frameworks programme, as we have heard, provides a simple solution that already exists. The programme is generally thought to have been a positive and consensual process to try to find the right balance. Indeed, as the revised frameworks analysis published by the Cabinet Office states:

“The cooperative approach on frameworks so far demonstrates the progress that can be achieved through proceeding collaboratively”.


As we have heard, however, the Bill as drafted ignores the common frameworks completely. There is not so much as a reference. The Minister said at Second Reading that the Bill does not make the common frameworks redundant, but it is very difficult to agree with that. As explained earlier, any divergence of regulation by a devolved Administration will be undermined by the precedence that this Bill gives to unfettered market access. I really do not see that that is an arguable point. It is the logical result of this Bill.

It is hard not to sympathise with the view of the devolved Administrations that the hard work and constructive engagement on trying to reach agreement on the common frameworks has effectively been torn up by this Bill. The Government cannot, in all honesty, be surprised that the devolved Administrations have rejected it. It is precisely this kind of heavy-handed, non-collaborative behaviour that is adding to the impetus towards the breaking up of our United Kingdom, which I am extremely worried about.

I said at Second Reading that I am not fully convinced that this Bill is actually necessary to achieve its stated aims. The Constitution Committee, and a number of noble Lords, has made the same point. However, I can see that there is some argument for the market access rules it creates, provided that they genuinely work alongside the common frameworks. However, for that to work without undermining them, the common frameworks must be recognised in the Bill, and any agreed permitted divergence from common standards allowed by the common frameworks must take precedence over the mutual recognition and non-discrimination principles of the Bill.

There are a number of ways to achieve that end, and the amendments in this group try to do this in different ways. I am particularly attracted by the approach taken by my noble and learned friend Lord Hope of Craighead in his Amendments 5, 11 and 53, and by Amendment 170, in the name of the noble and learned Lord, Lord Mackay of Clashfern. These seem to be a neat and simple way of recognising the common frameworks explicitly in the Bill and giving them precedence over the market access principles where appropriate, without undermining the Bill as it stands. I am also drawn to the introduction of the proportionality and subsidiarity principles in Amendment 2, which were discussed earlier.

I was heartened by the Minister’s commitment at Second Reading that the Government will

“study carefully the observations of your Lordships’ Select Committees on this part of the Bill”.—[Official Report, 20/10/20; col. 1427.]

Accepting these amendments, or something like them, would recognise that the internal market can work perfectly smoothly in a more nuanced, flexible and collaborative manner, just as it has in the past. That would show sensitivity to the legitimate and reasonable concerns of the devolved Administrations, and the respect for devolution that the noble Lord, Lord Callanan, referred to earlier today, without undermining the smooth-running internal market that we all want and which this Bill is intended to achieve. I would therefore urge strongly the Government to consider these amendments in a constructive light.