United Kingdom Internal Market Bill

Paul Scully Excerpts

Consideration of Lords amendments
Thursday 10th December 2020 Commons Chamber

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

I beg to move,

That this House disagrees with the Lords in their amendments 1B, 1C and 1D.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to consider the following:

That this House agrees with the Lords in their amendments 8B, 8C, 8D, 8F, 8G, 8H, 8J and 8K, but disagrees with the Lords in their amendment 8L, insists on its disagreement with the Lords in their amendments 13 and 56, and proposes amendment (a) to the Bill in lieu of Lords amendments 8L, 13 and 56.

That this House insists on its disagreement with the Lords in their amendments 14 and 52 to 54 but does not insist on its disagreement with the Lords in their amendment 55.

That this House does not insist on its disagreement with the Lords in their amendment 44.

That this House does not insist on its disagreement with the Lords in their amendment 45, and proposes amendment (a) instead of the words left out by the Lords amendment.

That this House does not insist on its disagreement with the Lords in their amendment 47, and proposes amendment (a) to the Bill consequential upon the Lords amendment.

That this House disagrees with the Lords in their amendments 48B and 48C.

That this House agrees with the Lords in their amendment 50B, but disagrees with the Lords in their amendment 50C.

That this House agrees with the Lords in their amendment 51B.

[Paul Scully]

I will try to be brief in going through the amendments—but with some detail, Madam Deputy Speaker—to make sure that others can speak.

I am glad that, since our last debate on the Bill on Monday, there have been a number of very positive developments. I am delighted that the peers in the other place and the Government have worked together constructively to agree on a number of areas. However, it is clear that there are still a number of outstanding issues, which I will address today. I will set out the Government’s rationale and I call on this House to support the Government’s proposals.

I want to start with some of the positive developments, notably on part 5 and Lords reasons 14B, 45B, 52A, 53A, 54A and 55A. The Government have been clear throughout that they were committed to implementing the withdrawal agreement and the Northern Ireland protocol. We were also clear that as a responsible Government we could not allow the economic integrity of the UK’s internal market to inadvertently be compromised by the unintended consequences of the protocol. That is why, through clauses in the Bill, we sought limited and reasonable steps to create a legal safety net by taking powers in reserve, whereby Ministers could guarantee the integrity of the United Kingdom and ensure that the Government were always able to deliver on their commitments to the people of Northern Ireland.

We sought those measures to guard against the possibility of not reaching agreement with the EU at the Joint Committee. As my right hon. Friend the Chancellor of the Duchy of Lancaster and his EU counterpart have reached an agreement in principle, I am pleased to say that the clauses that provided for the safety net are no longer needed and the Government are removing them from the Bill: that is, clauses 44, 45 and 47.

I am pleased that the other place has now also agreed to clauses 42, 43 and 46 and consequential amendments, which are purely about protecting Northern Ireland’s place in the UK customs territory and internal market, delivering unfettered access in line with the Northern Ireland protocol and codifying in legislation existing practice in terms of the Foreign Secretary notifying the European Commission on state aid.

Alongside that, and in line with the agreement in principle, we have tabled a new clause that will require the Secretary of State for Business, Energy and Industrial Strategy to set out guidance for public authorities on how the state aid provisions of the protocol will work in practice, as well as consequential amendments as a result of removing clauses 44, 45 and 47. Guidance must take account of any declarations made by the EU and the Joint Committee, which would include the proposed EU declaration that forms part of the package agreed in principle by the Chancellor of the Duchy of Lancaster. I call on the House to agree with the Government’s approach in this area.

I turn now to amendments 1B, 1C and 1D. Yesterday, noble Lords in the other place once again commended the importance of the Government’s continuing co-operation with the devolved Administrations on the common frameworks programme and reiterated their support for it. I would like to take the opportunity to thank the noble and learned Lord Hope for his considered intervention yesterday, and for all his thoughtful work on the Bill. However, while his new amendments would clarify the interaction between divergence agreed under common frameworks in the market access principles, they would still potentially undermine the certainty that the market access principles are designed to provide for business, because of the possibility of differing interpretations of what is permitted under an agreement. Moreover, as I set out on Monday, the amendments could create a broad exclusions regime. In itself, that denies businesses and consumers much needed clarity about the terms of trade within which they operate.

I would also like to take this opportunity to remind the House that common frameworks are processes for negotiation and reaching agreement, and are not in themselves a policy outcome. Wholesale exclusions from the market access principles of agreement reached through the common frameworks process could therefore lead to the unacceptable risk of harmful trade barriers being erected across the UK. Such barriers could not be erected under the EU system unless justified and notified to the Commission, and they are undesirable in our own UK internal market. For those reasons, I respectfully suggest that the approach put forward in the amendments is not appropriate.

I have said previously that the Government are committed to completing the delivery of the common frameworks programme and protecting these areas of co-operation to the benefit of jobs, people and livelihoods. We welcome the support of hon. and right hon. Members here in achieving that. However, amendments 1B, 1C and 1D have considerable drawbacks and I therefore call on the House to disagree with them.

Let me turn to Lords amendment 8L. I remind the House that, in drafting the Bill, and clause 10 specifically, the Government designed an exclusions approach that achieves a careful balance. It sits within the fundamental framework of the market access principles, which protect the UK’s highly integrated internal market, but allows the Government to remove very targeted and specific policy areas from scope, so it can continue to operate for the particular conditions, where they are needed, under the bespoke constraints that are relevant to those circumstances. Let me repeat the point for emphasis: we agree that there is a need for an exclusions regime, but one that is carefully drafted and provides certainty for business.

I am therefore disappointed that the other place has again voted to upset that careful balance with an altered, but still fundamentally flawed, expansive list. It would render the protections and benefits of the internal market proposals under part 1 meaningless. This would allow unnecessary trade barriers and unjustifiable costs to businesses and consumers.

Amendment 8L captures all kinds of public policy objectives and only requires a new regulation to make a contribution to any of the aims in the list. That means that almost any regulation that the UK Government or the devolved Administrations propose in the future could be excluded from the scope of the market access principles. I therefore call on the House to disagree with amendments 8L, 13 and 56, and agree with the Government’s amendments in lieu.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The Minister refers to the Government amendment, which also refers to consultation and consent. Yesterday, the Senedd voted to withhold consent from the internal market Bill. Its provisions regarding consultation are meaningless. When he says that Wales will be consulted, what we hear is contempt. Will he admit that to press ahead regardless, against the express will of the people of Wales and Welsh democracy, is to follow, as Lord Thomas put it in the other place, the

“discredited principle of ‘Westminster knows best’”?—[Official Report, House of Lords, 25 November 2020; Vol. 808, c. 278.]

[Paul Scully]

We want to work with the Welsh Senedd. We want to work with the Welsh people. We want to work particularly to ensure that Welsh businesses have certainty, and English, Scottish and Northern Irish businesses as well. That is why we need to work at pace to ensure that we have an internal market that works for all come 1 January.

Let me turn to amendments 48B and 48C. It is right, as we leave the transition period, that the UK Government have the right tools to make sure the whole country can benefit from investment, which strengthens the communities, economies and connectivity within and between all parts of the UK. I emphasise once again that this power is in addition to the devolved Administrations’ existing power. It does not take away responsibilities from the devolved Administrations; rather, the power will enable the UK Government to deliver investment more dynamically and in collaboration with the devolved Administrations and other partners.

The Government will work with the devolved Administrations to ensure we can complement their existing and continuing powers, used to support citizens in Scotland, Wales and Northern Ireland. We will also work collaboratively with other crucial partners, including local authorities and wider public and private sector organisations.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

If the desire is to work collaboratively, why on earth are the Government rejecting these amendments, which simply ask for consent from the devolved Administrations? That would be collaboration.

[Paul Scully]

I have talked about the fact that we have spoken with the Scottish Government and continue to do so and we are very open to that. What has been frustrating, in terms of collaboration, is that although we have collaborated on common frameworks, the Scottish Government have pulled away from discussions about the internal market, and that started to cause this detachment. But we do want to hold out our hand to make sure we can continue to collaborate in the future to complement, as I said, the existing powers.

I want to touch briefly on the UK shared prosperity fund. This power means that the UK Government can make good on our commitment to the UKSPF. The UK Government intend to work with the devolved Administrations and with local communities to ensure that this power is used to best effect and that the UK shared prosperity fund supports citizens across the UK. Indeed, we have confirmed that the devolved Administrations will be represented on the UK SPF governance structures. The Government will set out further details of the objectives and administration of the shared prosperity fund in the UK-wide investment framework, which will be published in the spring. We will continue to engage the devolved Administrations as we develop the investment framework in advance of its publication.

--- Later in debate ---

[Paul Scully]

I appreciate everybody who has taken the time to speak today. My hon. Friend the Member for Stone (Sir William Cash) spoke about the “notwithstanding” paragraphs in the Bill. Clearly, we have made the arrangements. We have found an agreement with the Joint Committee, and I sincerely hope that that will continue through to the next stage, which will be getting a free trade deal, on which the Prime Minister is working very hard with Lord Frost and his counterparts in Brussels. We will always make sure that we look after unfettered access for Northern Ireland into GB, which comes to the points that my hon. Friend made.

[Sir William Cash]

I did ask for an assurance in general terms that the necessary measures would be taken in primary legislation if things were to go wrong for the future. That is all I am asking for. It is not very much, but it is really important in relation to the potential striking down in legislation.

[Paul Scully]

I appreciate what my hon. Friend says. I think we will give the appropriate measures and protections, whatever form that comes as—if it is indeed needed; I hope that it is never needed in the first place. We will look to make sure that we protect Northern Ireland and its unfettered access.

My hon. Friend talked about state aid rules in Northern Ireland. They will apply to Northern Ireland as agreed under the withdrawal agreement and the Northern Ireland protocol, but they are not the same state aid rules that apply today, because there are new flexibilities of service providers. We welcome that agreement in principle in the Joint Committee, which was about managing the risk of reach-back into Great Britain and guards against the Commission taking an extreme or irrational interpretation of article 10 of the protocol. That means that there is no longer a need for the safety net.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) talked about the common frameworks and Scotland’s involvement. I hope I was correct in saying that I believed that the Scottish Government pulled away from discussions about the internal market, not common frameworks. I hope that is clear; if I did mis-speak, that was exactly what I meant to say.

We have now had 90 hours of scrutiny on this Bill across both Houses. I reiterate that I am grateful for how right hon. and hon. Members in this place have debated, scrutinised and engaged on the Bill. I said on Monday and again emphasise that we have been and will continue to be reasonable in discussions on this Bill. Since Monday, we have had a lot of good, positive movement and agreement and we welcome that, but ultimately, Government need to balance this with the need to deliver a Bill that provides the certainty that business wants and needs to invest and create jobs.

[Mr Deputy Speaker (Mr Nigel Evans)]

Perhaps somebody from the SNP could inform the Chair privately who its Tellers might be, should they go afterwards.

Question put.