United Kingdom Internal Market Bill

Paul Scully Excerpts

Tuesday 22nd September 2020 Commons Chamber

[Bim Afolami]

I rise in support of the Bill.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Hear, hear.

[Bim Afolami]

I am glad that the Minister is in favour of the Bill as well; that is good news.

In the modern world, trade matters just as much as—if not more than—it ever has. There has been much talk about trade, not just over the days in which we have considered the Bill, but over the past couple of years. I do not want to put us through the last couple of years again, but we spend a lot of time talking about tariffs. Although tariffs are important, the biggest obstacles in modern trade are often non-tariff barriers such as professional standards, standards for goods or different standards relating to services. The whole Bill seeks to address these aspects of trade, particularly through these clauses.

We need to consider not just trade between the United Kingdom and other countries, but trade within the United Kingdom. We all have businesses in our constituencies that trade. I was talking to a business in my constituency this summer about the places with which it is trading. I said, “Are you trading with China or the United States?” and the people from this business said, “With Aberdeen.” It is easy to forget that we need to ensure that our internal market—some people may prefer the term “internal single market”—is as seamless and as free as possible, and that is what this Bill does.

The Bill also ensures the principle of non-discrimination within the United Kingdom internal market. It allows businesses to expand within the UK as well as trading abroad, and helps businesses to access procurement from across the United Kingdom. For example, the Scottish Government may procure goods from a Welsh company, or Hertfordshire County Council may have a procurement contract with a Northern Irish business. Our trade within the United Kingdom is of paramount importance, and this House should not forget how much trade happens within our nation.

It is important to address some of the criticism of the Bill. I have been listening to the debate over the last couple of weeks, and, frankly, I find it rather odd hearing SNP Members criticise the Bill on the basis that the Scottish Parliament, the Welsh Assembly or the Northern Irish Assembly would not be able to have their own say vis-à-vis certain standards. On some level, one could argue that that is an argument for independence. Obviously that is the SNP’s stated position and they are entitled to have it, but contained in the same breath SNP Members are saying, “But we want the European Union to impose common standards.” We are talking about a European Union that, even under the most generous terms of electoral governance it may devise, would give the Scottish people, the Welsh people or the Northern Irish people—

--- Later in debate ---

[Lucy Powell]

The hon. Lady makes a good point. As Labour has been arguing throughout this crisis, local decisions are how we are going to overcome this virus, if we can make them effectively.

Many of the Government amendments are a tidying-up exercise and we have no quarrel with them. However, as learned Friends on the Labour Benches and in the other place, as well as on the Government Benches, know, Government amendment 66, which we will be voting on tonight, still amounts to tearing up an international agreement and breaking an international treaty that the Prime Minister has himself just signed. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) said in his excellent speech yesterday, the breach of international law is not when we enact the provisions of this Bill, but prior to that. The Government could not answer the point made by the right hon. Member for Staffordshire Moorlands (Karen Bradley) yesterday regarding the point at which this international treaty is being broken. Many would argue that even publishing these measures breaches article 5 of the withdrawal agreement. Can the Minister clarify that for us today?

The ink is not even dry on the bilateral treaty between the UK and the EU—a treaty that is about and for dealing with some of the difficult issues that we have debated over four days. Reneging on that treaty so soon, and the loss of trust resulting from that, is not comparable with a disagreement arising from a ruling by the European Court of Human Rights, as was the case with, say, prisoner voting, which was raised by Members across the House. Government Members do not have to take our word for it. They should listen to the right hon. Member for Maidenhead (Mrs May), who delivered the most scathing rebuke of this Bill yesterday, saying that the Government were “acting recklessly and irresponsibly” and warning of “untold damage” to the UK’s international reputation.

It could have been all so different. The Government could have worked cross-party and in a respectful way with the devolved Administrations to build a strong internal market based on mutual respect, to deliver the “oven-ready” deal we were promised, to enhance our reputation around the world, not diminish it, and to strengthen our precious Union, not put it at risk. Ministers could accept new clauses this evening and introduce further amendments on Report that unite the whole House. They could drop the clauses of the Bill that are so divisive and against the national interest. I hope that, for once, this Government will remove their blinkers and listen.

[Paul Scully]

It is a pleasure to serve under your chairmanship, Mr Evans, and to conclude this debate. We have heard a number of passionate contributions, not least from my hon. Friends the Members for St Ives (Derek Thomas), for North West Durham (Mr Holden), for Vale of Clwyd (Dr Davies), for Hitchin and Harpenden (Bim Afolami), for Montgomeryshire (Craig Williams) and for Bromley and Chislehurst (Sir Robert Neill), who were passionate about the Union and the need to ensure that businesses can continue to trade in Scotland, Wales, Northern Ireland and England without interruption.

Before I address the details of the clauses and amendments, let me explain what that means to each of the nations in the UK. About 50% of Northern Ireland’s sales are to Great Britain, and nearly 60% of Scottish and Welsh exports are to the rest of the UK, which is about three times as much as their exports to the whole of the rest of the EU. That is £51.2 billion worth of trade for Scotland, £10.6 billion for Northern Ireland and £30.1 billion for Wales. The Bill secures and clarifies the internal market, which has been the bedrock of our shared prosperity for centuries.

The Bill will establish a market access commitment by enshrining mutual recognition and non-discrimination in law. The principle of mutual recognition is that goods and services from one part of the UK will continue to be recognised across the country, and that ensures that the devolved Administrations will benefit from freedom outside the EU. As the transition period ends, they will gain increased powers to set their own rules and standards across a wide range of policy areas within their competence. At the same time, this provides firm assurances to our businesses, which they have been asking for, that their goods can continue to flow freely throughout the United Kingdom.

Non-discrimination ensures that there is continued equal opportunity for companies to trade in the UK regardless of where in the UK their business is based. Measures in the Bill will also ensure that Northern Ireland qualifying goods benefit from the market access commitment and receive mutual recognition in the rest of the UK. That means that we are going to fulfil our commitment to legislate for unfettered access, as we promised the people and businesses of Northern Ireland.

In addition, the Bill will ensure that the same principles of mutual recognition and non-discrimination continue to apply to services, and it will establish a process for the recognition of professional qualifications across the UK internal market, allowing professionals such as doctors and teachers qualified in any part of the UK nations to continue work in any other part, as all hon. Members would expect.

A couple of canards kept coming up during the debate, including one about teachers. As my hon. Friend the Member for Bromley and Chislehurst pointed out, someone needs to have a qualification in the first place for it to be recognised in another nation of the UK, but it is true that the General Teaching Council for Scotland will continue to regulate teaching in Scotland, as happens at the moment, uninterrupted. This package guarantees a continuation of the centuries-old position that there should be no economic barriers to trading within the UK. Businesses need this—they are asking for this. Citizens need this. That is why it is right that we deliver this Bill.

I turn to the amendments in question today, starting with some of those tabled by the Government. Government amendments 90, 91 and 92 are technical drafting amendments that I hope the House will be able to pass.

Government amendments 5 and 6 are designed to ensure that local sanitary and phytosanitary measures are based on science and are technically justified to prevent barriers to trade arising that go beyond what is necessary to effectively prevent pests and diseases spreading to pest and disease-free areas.

--- Later in debate ---

[Dr Whitford]

Does the Minister not accept that trying to improve public health, reduce waste and protect the environment are perfectly good reasons for a derogation?

[Paul Scully]

As I say, we are trying to keep this narrow so that one part of the UK does not face discrimination in another. We want to make sure that we get the balance right between having the benefits of the UK internal market and having legitimate aims on an environmental basis, on public health or on any number of other areas.

Amendment 36 seeks to alter the process by which the list of legitimate policy aims may be changed in the future. These aims allow for an exemption from the requirement prohibiting indirect discrimination, and that could therefore be cited as necessary for implementing a measure that is indirectly discriminatory. The aims are tightly drawn, but the Government recognise that it is important to retain flexibility for the future—for example, to reflect the experience of the effect of the market access principles in practice and based on business feedback. That is why the power is necessary and we cannot accept the amendment.

Amendment 80 seeks to exclude fisheries in Scotland from the market access principles. It is essential that the Scottish industry is able to maximise the return on its fish by being able to access a diverse range of markets and a wide range of consumers. Scottish fish is sold across the UK. However, this amendment would create new barriers to trade, going against the fundamental purpose of the Bill. The hon. Member for Central Ayrshire (Dr Whitford) talked about procurement. With regard to amendment 87, the Government intend to deliver measures on procurement through a wider package of procurement reform that is being implemented shortly after the Bill. A procurement rules reform Green Paper has been drafted and there will be a formal consultation. The aim is for separate primary legislation to follow.

I turn to new clause 5 and amendment 40. The protection of our environment and maintenance of high food standards are of great importance, and the UK Government are committed to maintaining standards across the UK in all these areas. The intention of the amendments appears to be to prevent Ministers from developing standards that differ from those in the EU, even where UK standards better serve the needs of the UK. On that basis, I urge Members not to move the new clause and the amendment.

I thank the hon. Members for Foyle (Colum Eastwood) and for Belfast South (Claire Hanna) for tabling amendments 81 to 85, as they raise the important issue of the recognition of professional qualifications in the common travel area. However, I must oppose the amendments as set out. This Bill is not the vehicle for honouring our commitments in relation to the common travel area. I can reassure the hon. Members that the UK Government acknowledge that the recognition of professional qualifications is an essential facilitator of the right to work associated with the common travel area. My officials are progressing work in relation to the common travel area so that the UK can continue to meet its commitments.

Amendment 27 seeks to give devolved Ministers the ability to decide which qualifications can be accepted as part of the internal market. By giving devolved Ministers the power to decide which qualifications should benefit from these provisions, we could reduce the number of professionals who can move within the internal market. The alternative recognition process outlined in clause 24 grants the flexibility, and will enable authorities to assess on a case-by-case basis whether a person’s existing qualifications and experience are sufficient evidence of the skills required for the profession in question.

I turn to new clause 10 and thank the hon. Member for Brighton, Pavilion (Caroline Lucas), who is no longer in her seat, for her contribution. As I have tried to highlight, the protection of the environment is hugely important and something to which this Government are very committed. However, passing this amendment would not be the best way to protect the environment. We have made sure that there are exemptions from indirect discrimination where the health of animals and plants and humans is concerned. Further to this, the powers in the Environment Bill will mean that future Governments must be open and transparent about the impact of future primary legislation on environmental protections.

Amendment 88 seeks to prevent the Bill from being placed into schedule 4 to the Scotland Act 1998, thus preventing it from being protected from modification or repealed by the Scottish Parliament. If the Bill were to be modifiable by one or more devolved legislatures, it would not be able to provide consumers and businesses with the vital certainty that they currently enjoy. Businesses trading in Scotland would need to consider how the Scottish Parliament may seek to amend or repeal elements of this legislation. That would create disruptive uncertainty, which must be avoided, particularly as we seek to support the UK’s economic recovery from the covid-19 pandemic.

I turn to amendments 9 and 39, and new clause 9. We will continue to work closely with the devolved Administrations to understand and respond to their concerns. In accordance with the Sewel convention, the UK Government have requested legislative consent motions for this Bill from all the devolved legislatures. New clause 9 in particular would place intergovernmental structures in statute, limiting the capacity for discussion among all Governments and the capacity to adapt to this change.

New clause 11 seeks to provide Parliament with information on the working of the Act in a context of developing common frameworks. It is essential that the Office for the Internal Market is available and able to perform its functions at arm’s length from political interference from the UK Government and devolved Administrations.

[Deidre Brock]

Will the Minister give way?

[Paul Scully]

I must bring my response to a close. The amendment risks undermining the independence of the CMA and its global reputation for producing credible, impartial and expert analysis.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will my hon. Friend give way?

[Paul Scully]

I cannot at the moment, I am afraid. I hope that hon. Members will not press their amendments to a Division, for the reasons that I have given, and that they will support the Government’s amendments.

My hon. Friend the Member for Bromley and Chislehurst talked about amendment 66, and I assure him that we will be moving it. I thank him for his work on resolving this issue.

The hon. Member for Poplar and Limehouse (Apsana Begum), who is not in her place, talked about the concerns over the Belfast agreement. The Bill does not interact directly with the Belfast agreement. It does interact clearly with the withdrawal agreement and the Northern Ireland protocol, but it seeks to make the Belfast agreement work in certain given circumstances.

[Kevin Hollinrake]

Earlier, my hon. Friend mentioned the Sewel convention. Could he set out exactly what influence it has on legislation that is made in Brussels?

[Paul Scully]

Exactly. As my hon. Friend knows, it has none. Importantly, as we bring back power from the EU to the UK Government, we will work to pass on many, many powers to the devolved legislatures, whether it is the Scottish Parliament, the Welsh Assembly or the Northern Ireland Assembly. They will be getting powers, and we will all work together as the UK to give businesses the continuity that they need with our UK internal market.

[The Second Deputy Chairman]

I have several pages of amendments and clauses that I will put before the House. At this stage, may I reiterate the Speaker’s stricture? I will do this now, and I will do it again before the vote, but people are normally already moving when we do this just before the vote, and nobody is moving at the moment, so I have a captive audience. I therefore use this time to re-emphasise that if Divisions take place on any of the clauses, new clauses or amendments, the Front Benchers can go towards the exit in front of me to vote and use the card readers. Let us hope that they are working this time; they should be. Everybody else, please—calmly and with social distancing—leave through the exit behind me and make your way towards Westminster Hall, where you will do a socially distanced conga towards the Division Lobbies to present your cards to the readers. I hope that that is understood.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

The mutual recognition principle for goods

Amendments made: 90, page 2, line 6, leave out paragraph (b) and insert—

“(b) can be sold there without contravening any relevant requirements that would apply to their sale,”

The amendment makes a drafting correction to clause 2(1)(b) to cater more clearly for relevant requirements that take the form of a prohibition. The new wording means that the previous reference in parenthesis to a case where there are no relevant requirements is no longer necessary.

Amendment 91, page 2, line 15, leave out from “can” to end of line 17 and insert

“be sold by auction in the originating part without contravening any applicable relevant requirements there”.—(Michael Tomlinson.)

The amendment makes clause 2|(2) conform to the wording of clause 2)1)(b) as amended by Amendment 90.

Clause 2, as amended, ordered to stand part of the Bill.

Clauses 3 to 10 ordered to stand part of the Bill.

Schedule 1

Exclusion from market access principles

Amendments made: 5, page 42, line 5, leave out from “The” to “not” on line 6 and insert

“United Kingdom market access principles do not apply to (and sections 2(3) and 5(3) do”.

This amendment means that measures aimed at preventing the spread of pests or diseases are capable of being excluded from the non-discrimination principle for goods (as well as the mutual recognition principle for goods).

Amendment 6, page 42, line 26, at end insert—

“(6A) In determining whether the fifth condition is met the following consideration is to be taken into account: whether the legislation, taken together with any similar legislation applying in the restricting part, imposes measures of similar severity in response to threats of similar severity arising from the potential movement of the pest or disease into, or within, the restricting part (wherever those threats originate).”

This amendment means that, in assessing whether a measure aimed at preventing the spread of pests or diseases can reasonably be justified as necessary, account will be taken of whether similar threats are addressed with similar severity.

Amendment 7, page 45, line 2, at end insert—

“Fertilisers and pesticides

8A The mutual recognition principle for goods does not apply to (and section 2(3) does not affect the operation of) any of the following—

(a) a prohibition or condition imposed in accordance with Article 15(1) of Regulation (EC) No 2003/2003 of the European Parliament and of the Council of 13 October 2003 relating to fertilisers, as it forms part of retained EU law;

(b) regulations under section 74A(1) of the Agriculture Act 1970, to the extent that such regulations can reasonably be justified as a response to a risk to—

(i) the health or safety of humans, animals or plants, or

(ii) the environment.

8B The mutual recognition principle for goods does not apply to (and section 2(3) does not affect the operation of) any of the following—

(a) Regulation (EC) No 1107/2009 of the European Parliament and of the Council of 21 October 2009 concerning the placing of plant protection products on the market (etc), as it forms part of retained EU law;

(b) the Plant Protection Products Regulations 2011 (S.I. 2011/2131);

(c) the Plant Protection Products Regulations (Northern Ireland) 2011 (S.R. (N.I.) 2011 No. 295).”—(Michael Tomlinson.)

This amendment excludes certain measures in relation to fertilisers and pesticides from the operation of the mutual recognition principle for goods.

Schedule 1, as amended, agreed to.

Clauses 12 and 13 ordered to stand part of the Bill.

Clause 14

Interpretation of other expressions used in Part 1

Amendments made: 93, page 8, line 38, after “thing” insert

“(including any packaging or label)”.

The amendment clarifies that “goods” for the purposes of Part 1 includes their packaging and any label attached to them.

Amendment 94, page 8, line 41, leave out

“significant regulated step in their production”

and insert

“significant production step which is a regulated step”.

The amendment, with Amendment 95 clarifies the rule for determining whether goods have been produced in a part of the United Kingdom for the purposes of Part 1.

Amendment 95, page 9, line 1, leave out subsection (4) and insert—

“(4) A production step occurring in a part of the United Kingdom is “regulated” for the purposes of subsection (3) if —

(a) it is the subject of any statutory requirement in that part of the United Kingdom, or

(b) it is a step that could materially affect a person’s ability to sell the goods without contravening—

(i) any relevant requirement for the purposes of the mutual recognition principle for goods, or

(ii) any statutory requirement that is excluded from being a relevant requirement by section 4(1),

that would be applicable to a sale of the goods in that part of the United Kingdom (being a sale of a kind for which the goods are being produced).

(4A) A production step is “significant” for the purposes of subsection (3) if it is significant in terms of the character of the goods being produced and the purposes for which they are to be sold or used (but see subsections (4B) and (4C)).

(4B) A production step falling within any of the following descriptions is not significant (whether or not it is regulated)—

(a) activities carried out specifically to ensure goods do not deteriorate before being sold (such as maintaining them at or below a particular temperature);

(b) activities carried out solely for purposes relevant to their presentation for sale (such as cleaning or pressing fabrics or sorting different coloured items for packaging together);

(c) activities involving a communication of any kind with a regulatory or trade body (such as registering the goods or notifying the goods or anything connected with them or their production);

(d) activities carried out for the purpose of testing or assessing any characteristic of the goods (such as batch testing a pharmaceutical product).

(4C) A production step involving the packaging, labelling or marking of goods is not significant (whether or not it is regulated) unless the step is fundamental to the character of the goods and the purposes for which they are to be sold or used.”

The amendment explains terms used in clause 14(3) as amended by Amendment 94.

Amendment 92, page 9, line 27, at end insert—

“(10) “Contravening” includes failing to comply.”—(Michael Tomlinson.)

This drafting amendment ensures that references to contravening a relevant requirement cover a failure to comply with such a requirement (for example a failure to comply with a condition).