United Kingdom Internal Market Bill

Baroness Winterton of Doncaster Excerpts

Tuesday 15th September 2020 Commons Chamber

[Dame Rosie Winterton in the Chair]

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I should explain that in these exceptional circumstances, although the Chair of the Committee would normally sit in the Clerk’s chair during Committee stage, in order to comply with social distancing requirements I will remain in the Speaker’s Chair, although I will be carrying out the role not of Deputy Speaker but of Chairman of the Committee. We should be addressed as Chairs of the Committee, rather than as Deputy Speakers.

Clause 28

Functions of the CMA under this Part: general provisions

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I beg to move amendment 28, page 20, line 31, leave out “, Scotland”.

This amendment would exempt from the operation of Part 4 (independent advice on and monitoring of UK internal market) regulatory provisions applying in Scotland which did not apply to the whole of the UK.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Clause 28 stand part.

Amendment 29, in clause 29, page 21, line 3, at the beginning insert

“Following legislative approval from all devolved administrations,”.

This amendment would ensure that the CMA may only undertake a review following legislative approval from all devolved administrations.

Clauses 29 to 34 stand part.

Amendment 21, in clause 35, page 26, line 16, at end insert—

“(1A) Prior to publishing the information in subsection (1) the CMA must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland about how it is to approach the exercise of its functions.”

The intention of this amendment is to ensure that the devolved administrations are consulted before the CMA determines how to exercise its functions in regard to the UK Internal Market.

Clauses 35 to 37 stand part.

Amendment 30, in clause 38, page 29, line 22, after “must” insert

“obtain the agreement of the devolved administrations and”.

This amendment would ensure that the Secretary of State cannot decide amount for penalties with CMA without agreement from devolved administrations.

Clauses 38 and 39 stand part.

New clause 1—Dispute resolution mechanism—

“(1) Within the period of two months after the day on which this Act is passed, the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland about how any disputes relating to the functioning of the internal market will be resolved between the four parts of the United Kingdom.

(2) Within the period of three months after the day on which this Act is passed, the Secretary of State must lay before each House of Parliament a report detailing how any disputes relating to the functioning of the internal market will be resolved between the four parts of the United Kingdom.

(3) Any dispute resolution mechanism established by the Secretary of State must provide for representation from each nation of the United Kingdom.”

The intention of this clause is to help resolve the functioning of the internal market between the four nations of the United Kingdom.

New clause 2—Limits on powers to override common frameworks—

“The Secretary of State shall not make any order or regulations under this or any other Act of Parliament that has the effect of imposing lower standards on Scotland, Wales or Northern Ireland, in any area for which a common framework—

(a) has been agreed,

(b) is in development, or

(c) becomes necessary,

unless, where subsection (b) or (c) above applies, the Secretary of State judges that a reasonable period has passed and the negotiations have failed to reach agreement, and a draft of the order or regulations has been laid before and approved by resolution of each House of Parliament.”

This new clause puts common frameworks on a statutory footing. Where there is a common framework agreed, Ministers would not be able to override them through secondary legislation to impose lower standards on devolved nations. Where a common framework was in development, or a new common framework became necessary, Ministers could not impose standards until the negotiation of common frameworks had taken place between the nations of the UK and failed to reach agreement after a reasonable period. The UK Parliament would be the ultimate arbiter of standards if reasonable agreement could not be reached.

New clause 3—Duty to consult, monitor and report—

“The CMA has a duty to consult with all relevant national authorities and shall produce monitoring reports on

(a) changes in standards, and

(b) assessments of whether standards have been met.”

New clause 4—Appointment of members to the Competition and Markets Authority board by the devolved administrations—

“(1) Schedule 4 of the Enterprise and Regulatory Reform Act 2013 is amended as follows.

(2) After sub-paragraph 1(1) insert—

‘(1A) The members appointed under sub-paragraph (1)(b) must include—

(a) a member appointed by the Scottish Ministers,

(b) a member appointed by the Welsh Ministers, and

(c) a member appointed by the ministers of the Northern Ireland Executive.’”

This new clause gives the devolved administrations the power to each appoint a member to the board of the Competition and Markets Authority.

[Drew Hendry]

Dame Rosie, it is a pleasure to serve under your chairmanship. I rise to talk to amendments 28 to 30 in my name and those of my right hon. and hon. Friends.

When the Institute for Government warned that

“it is not clear how disputes around the functioning of the internal market will be managed”,

it opened up the yawning and damning gap in the plans for the governance of the internal market. As a result of ditching co-operation over common frameworks, this Government propose to fill the gap with an Office for the Internal Market—an unelected quango. I will return to the composition of that body shortly. The Office for the Internal Market will have an effective veto over the Scottish Parliament, and the subsequent result is that devolution will be hamstrung. This is yet another step in introducing a system where standards are set by Westminster and they must be accepted by Scotland in devolved areas.

Analysis by the Scottish Government has revealed that successful Scottish policies such as alcohol minimum unit pricing, our policy on tuition fees and the ban on smoking in public places would be among the Bills referred to the Office for the Internal Market. That has been opposed by many bodies who have shone a light on this. The National Farmers Union Scotland has raised a series of concerns about the function of the Office for the Internal Market’s dispute resolution mechanism in managing policy differences, ensuring that the UK Government do not have the final say on areas of devolved policy, including agriculture, and enabling the devolved Administrations to act where it is considered that a policy aligning in a particular manner is unfavourable to devolved interests such as agriculture.

Of course, it would not have to worry about that if the UK Government had simply continued work on common frameworks. Common frameworks are designed to manage cross-UK divergence where EU law and devolved competencies intersect, including in relation to the functioning of the UK domestic market, together with existing processes for regulatory impact assessment and existing structures for regulatory co-operation and information sharing. Let us be clear: they do not need to be supplemented or undermined by a new, unelected body.

--- Later in debate ---

We will have our own system, on our own terms, in accordance with the decision taken by the British people in the general election last December, which endorsed the decision that was made in the referendum. I do not want to go through that whole argument from beginning to end but it is relevant to this debate, because when we do leave the European Union in all its shapes and forms, we will be in a position to make decisions in the interests of all the people in the Union and with regard to the importance of the devolved Administrations. The provision for the markets authority will be a very fair way of conducting our proceedings. This will serve everybody a great deal of good and we will all benefit from it.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

Claire Hanna has withdrawn so we go straight to Richard Fuller.

[Richard Fuller (North East Bedfordshire) (Con)]

Thank you very much, Dame Rosie—that was unexpected. It is a great pleasure to serve under your chairmanship, and to have the opportunity to raise some general points and specific questions relating to the clauses under consideration today.

Overall, I am very supportive of the Bill, but, as with any substantial change, caution, checking and prudence should be part of the Government’s process. When I look at regulations and regulatory frameworks—which perhaps I do a little too often—uppermost in my mind is the quality of the regulations or framework, their effectiveness, their relevance, and whether we have the correct allocation of decision authorities given the different parts of the United Kingdom or different groups for which the regulations are being made.

On that last point, I want to pick up on some of the issues that animated the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and perhaps others in their questions about the choice of a common approach compared with a common framework. I should perhaps know more about this area, but it is alluded to in paragraph 8 on page 5 of the explanatory notes to the Bill, which states:

“As part of its vision for the UK internal market, the Government is also engaging in a process to agree a common approach to regulatory alignment with the devolved administrations. The Common Frameworks Programme aims to protect the UK internal market by providing high levels of regulatory coherence in specific policy areas through close collaboration with devolved administrations.”

Where is that in the Bill or today’s considerations? What is the Government’s current thinking around engaging in a process to agree a common approach as part of their vision, as the explanatory notes state?

I did not get an answer from the hon. Member for Inverness, Nairn, Badenoch and Strathspey to my question about how disputes would be resolved in a common frameworks approach, which seems like a fundamental issue.

--- Later in debate ---

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (SNP)]

Before I consider part 4, I wish briefly to set the context of the comments that I will make.

Yesterday, Scotland’s friends in the EU and the wider international community were concerned that a UK Prime Minister was prepared to sacrifice the rule of law in a vain attempt to save his own bacon. Of course, there is disbelief that this arrogance is voiced outside the Cummings bubble, but the deliberate trashing of the UK’s international standing is now endorsed by 340 parliamentarians so can no longer be regarded as the ravings of a few. They are all now complicit in this grand folly of legislation.

The Bill is a disgraceful piece of legislation led by a Prime Minister whose words mean nothing and a party that is lurching ever further to the right, breaking the rules, acting unlawfully and now rewriting its own laws, while rubbishing any moral authority the UK had to hold rogue states—

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

Order. The hon. Gentleman should resume his seat. I draw his attention to the fact that he needs to address the amendments before us. This is not a Second Reading speech all over again; it is important to address what is before the House today.

[Neale Hanvey]

Thank you, Dame Rosie. My preface to my comments was just to set the scene, which is what I am doing, but as I move on my comments will relate to the amendments.

The Prime Minister has presided over a summer of U-turns, U-turned on his own Brexit deal and turned away from the rule of law. The comments in terms of Scotland can be summed up by the Law Society of Scotland’s reflections on the Bill. It has stated that

“as a matter of principle”

the Bill should comply with the oldest principle of international law,

“pacta sunt servanda (agreements are to be kept)”.

Quite unfortunately, Scotland has a head start in knowing the hollowness of such a principle. [Interruption.] I’m sorry?

[The First Deputy Chairman]

Order. The hon. Gentleman cannot have conversations across the Chamber. I would be grateful if he moved on to the amendments before us as quickly as possible. Thank you.

[Neale Hanvey]

This debate is focused on part 4, in which the authority of the Competition and Markets Authority and the wide-ranging and poorly specified powers of the UK Government’s man in Scotland are nothing short of a British nationalist inquisition. There are wide-ranging powers that cut to the very heart of the devolution settlement across every policy area—powers that the Government claim they will never use; they are there just in case. Well, Scotland is not buying it, and we are not having any of it. Devolution is the settled and robustly expressed will of the Scottish people, and it must be for the Scottish people alone to decide whether it should ever be restricted or changed in any way.

Part 4 of this wrecking-ball Bill takes decision-making powers away from Holyrood and hands them to the unelected body of the Office for the Internal Market. This office of inquisition will have the power to pass judgment on devolved laws and could quickly become the target of rich corporate lobbyists determined to see activities such as fracking go ahead against the will of the Scottish people.

--- Later in debate ---

[Jane Hunt]

Sorry, I was a bit keen. Do you agree that without the Bill—without the internal market structure—Scotland would be worse off? [Interruption.] Forgive me, but let me explain my point. I will not talk about whisky, because we always do that when we are talking about Scotland; I will talk about lenses for glasses, which are often made in Scotland. A large number of them are made in Scotland and go across the whole UK. If we did not have the internal market structure, then there could be tariffs—restrictions—on their being sold in, say, Wales or England. So why would you not want to accept this now?

[The First Deputy Chairman]

Order. May I just point out that it is very important not to use the word “you” to another Member? We speak to the Chair, so it is “the hon. Member” rather than “you”, just to clarify that.

[Neale Hanvey]

The hon. Lady raises a really interesting point. I wanted to get it into my remarks, and she has now given me a very clear avenue in which to do it. I cannot understand how she could come up with the suggestion that the UK would enforce its own internal tariffs, but with regard to Scottish competitiveness in this internal market, Scotland is already at a disadvantage. There is a company in my constituency that imports chassis from the EU but does not make its lorries here completely—like many of its EU competitors, it buys certain parts and puts them together. Those EU companies would be allowed to import a fully completed vehicle without any tariff, while that company would be subject to a high tariff on the importation of those chassis and therefore at a competitive disadvantage. That is because of Brexit. I am grateful to the hon. Lady for her point. I would also be grateful if the Minister took cognisance of my comments and gave me a detailed response about how the Government will protect companies such as that in my constituency from this type of disadvantage in the importation of completed vehicles.