United Kingdom Internal Market Bill

Viscount Trenchard Excerpts

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Monday 9th November 2020 Lords Chamber

For the sake of Britain’s effectiveness in repairing a rules-based international system grievously damaged over the last four years, in addition to all the other powerful arguments that have been advanced this evening, I shall be voting tonight with the noble and learned Lord, Lord Judge, so that Clauses 42 to 47 do not stand part of this Bill.

[Viscount Trenchard (Con) [V]]

My Lords, I agree with my noble and learned friend Lord Clarke of Nottingham in so far as he praised the speech of my noble friend Lord Lilley twice for its pragmatism. Beyond that, I find myself in agreement with my noble friends Lord Lilley, Lady Noakes, Lady Couttie, Lady Neville-Rolfe and Lord Shinkwin and the noble Baronesses, Lady Hoey and Lady Fox of Buckley, that this Bill, including Part 5, is indeed necessary.

I salute the Government for their good sense in dealing now with the inconsistencies in the withdrawal agreement. It is regrettable that the inconsistencies were not cleared up at the time of signing that agreement, but it was reasonable to believe that the EU’s negotiators would act in good faith in their efforts to reach an agreement on the future relationship that would have solved most of the inconsistencies. It seems that it remains difficult for Mr Barnier and his team to accept that the UK is becoming a sovereign, independent country and will not accept terms that effectively require us to continue to adhere to EU regulations, especially concerning state aid, nor will it accept the jurisdiction of the European Court of Justice in the determination of any part of our agreement on our future relationship or any connected enforcement proceedings.

I do not share the strong negative reaction of many noble Lords to the Government’s introduction of this Bill, for the reason that it seeks to disapply certain provisions of the withdrawal agreement signed by the UK and the EU in September 2019. I would argue that entering into the withdrawal agreement without first agreeing the framework for our future relationship with the EU was in itself a breach of Article 50 of the Lisbon treaty. Does the Minister agree that it could be argued that the signing of the withdrawal agreement and indeed the subsequent enactment of the European Union (Withdrawal) Act 2018 clearly breaches international law?

The noble Lord, Lord Kerr of Kinlochard, was wise to draft Article 50 as he did. I regret that the European Commission ignored its terms and the previous Government acquiesced in their insistence that agreeing the framework for our future relationship should be deferred. This makes it much more difficult to agree the future relationship, as we are now trying to do with very little time remaining before the end of the implementation period. If we had observed the terms of Article 50, a significant part of the provisions of this Bill, especially those that affect the Northern Ireland protocol, would not have been necessary. Furthermore, David Wolfson QC argues convincingly that the sovereignty of the Crown in Parliament means that the Government are bound to proceed with any Act of Parliament even if it should give rise to a claim under an international treaty. Mr Wolfson argues that there would be

“no breach of the rule of law.”

A similar position has been supported by Jolyon Maugham QC, who has argued that parliamentary sovereignty enables Ministers to advise on and recommend, and Parliament to enact, legislation that breaches international law. He observed:

“Whether it is a ‘good idea’ to breach international law”—


by implementing these measures—

is a political judgment”.

The noble and learned Lord, Lord Falconer of Thoroton, said that the passage of this Bill in this form risks making the UK “an international pariah”; many noble Lords have expressed a similar view. However, the whole world knows the UK is still negotiating the basis of its exit from the UK. These negotiations continue; in the event that we fail to agree a free trade agreement, it will be well understood that the Government have a duty to ensure that the integrity of the United Kingdom is protected.

I respect the view of noble Lords who think otherwise, including the noble Lord, Lord Ricketts, but I just do not believe that the UK’s well-deserved reputation for honouring its word will be negatively affected in any way, any more than the German constitutional court’s ruling on the bond-buying programme of the ECB—that European law which conflicts with the German constitution may be overridden—affects the reputation of the Federal Republic of Germany as a well-behaved international citizen. The decision of the Court of Appeal in 2018 in response to the challenge by the Gulf Centre for Human Rights that ministerial duties in international law were not truly legal duties offers another example of the same point.

The noble and learned Lord, Lord Judge, and his co-signatories seek to remove all six clauses that constitute Part 5 of the Bill. This would mean that the ambiguities contained in the withdrawal agreement would endure, and the resulting uncertainty arising from the possible erection of a customs border in the Irish Sea would clearly breach the Belfast agreement. The noble and right reverend Lord, Lord Eames, in his eloquent speech proposing Amendment 161, argued that this Bill would upset and alter the basis of trade within the United Kingdom. I admire the great contribution that he has made, and continues to make, to the peace process. I was impressed by his arguments. However, I noted that he did not acknowledge at all that the Northern Ireland protocol itself upsets and alters the basis of trade in the UK.

I agree strongly with the noble and learned Lord, Lord Mackay of Clashfern, that compliance with the Belfast agreement should be regarded as a part of, and a prerequisite to, the withdrawal agreement. I support Amendments 158 and 159, which would create an additional exclusion from the prohibition imposed by Clause 43, but the reasons for checks following a threat to food or feed safety would be well understood. I understand the intention of the noble Lord, Lord Hain, in Amendments 162 and 163; I sympathise with him. However, other clauses of the Bill already prohibit discrimination against goods produced in any part of the United Kingdom, so his amendments are superfluous. I look forward to the Minister’s comments on these and other measures.

[Lord Howard of Rising (Con)]

My Lords, I have read an enormous amount of very learned opinion, produced by many distinguished members of the legal profession, saying that Part 5 of the present Bill does not break international law—enough opinion to be absolutely clear that, however many people claim that the Bill is illegal, serious doubts remain over the claim that Part 5 is illegal, in spite of the many eloquent arguments for that case that have been put forward this evening.

Whatever view you take of Part 5—illegal or legal—there is sufficient doubt over the rights and wrongs that loyalty to one’s country demands that the wishes of the Government should take precedence over other views. The House should not get in the way of a Bill that will be of invaluable assistance to strengthen the hands of our negotiators in these last crucial days and weeks of the negotiations. The Bill will not make this country some kind of pariah, nor will we lose respect, as some have falsely claimed. The world will see it simply as part of us leaving the European Union.

It is not the role of this House to overturn the wishes of the other place, especially where the grounds for such action, as today, are not clear-cut. Furthermore, the other place has conceded that there must be a vote in Parliament before Part 5 is acted on. The ultimate authority in this country is the Queen in Parliament. It is what the British people have voted for, and we must do everything possible to ensure that this remains the case.

--- Later in debate ---

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, like other noble Lords, I pay my respects to the memory of Lord Sacks. His loss is immeasurable, and I am sure he would have contributed enormously this evening.

I have put my name to the proposal of my noble and learned friend Lord Thomas of Cwmgiedd that Clause 50 should not stand part of the Bill for a number of reasons. First, the clause is in direct contradiction to Ministers’ assertions that the Bill does nothing to remove powers from the Senedd. If that is the case, why is a new reservation necessary?

Secondly, and related to this, is the conundrum that the Government insist that state aid is already reserved. This position has long been strongly contested by the devolved Governments, who have always operated the state aid system, as the UK Government do in England. If there is doubt about the current legal disposition, would it not be better to ask the courts to interpret the meaning of the current reservation and whether it does or does not include state aid?

Thirdly, although I am no expert, I understand that the Government have been resisting pressure from the European Union during the still-ongoing negotiations to keep in place a state aid framework broadly similar to the one we have inherited through our membership of the EU. Indeed, the statutory instrument to revoke all state aid law is before this House. Why are a Government that seem so reluctant to commit to a rules-based system also so eager to take to themselves absolute power on this vital area of economic development policy?

The devolved Governments in Cardiff and Edinburgh are both in favour of retaining this framework in retained EU law. It is a clear system that provides a bulwark against the arbitrary use of public subsidies to support businesses in favour with the Government or to attract investment, something that is a real risk. Having the protection that this current situation affords for the Governments of the smaller nations of these islands is important because, at the end of the day, the UK Government in their “Government of England” mode can always trump any financial incentives that the devolved Administrations could offer in some kind of dog-eat-dog contest. This clause simply feeds the suspicion that, rather than maintaining a level playing field across the UK, this element of the Bill is about giving the Government the maximum freedom to do what they like with the system and channel investment to marginal Conservative seats.

Fourthly, it is probable that, despite their effort, the Government do indeed sign up to an agreement with the EU that requires the enhancement of a new system of state aid. I hope that the term “subsidy control” evaporates in the way the “implementation period” seems to. If that is the case, then the devolved institutions will have to conform to those new rules because they flow from an international treaty obligation, so this new reservation will be unnecessary.

Finally, I turn to what this clause, like so much else about this Bill, says about the Government’s approach to devolution. Quite simply, it would seem that they do not like it, would prefer it not to exist and want simply to pay lip-service to it. This is a Government that do not seem to tolerate any source of law and public policy that they cannot control and, having removed the rival source of authority of the EU, seem to be gunning for other bodies that have the power to make primary legislation. This is not just distasteful; it is profoundly dangerous for those of us who care deeply about the union. I appeal to the Government to rethink their approach urgently because, otherwise, they will see the country gradually disintegrate in front of their eyes.

[Viscount Trenchard (Con) [V]]

My Lords, when I read the three amendments of my noble friend Lady Rawlings, I was not sure exactly what had driven her to propose them. Of course, I am aware that my noble friend is a distinguished former chairman of King's College London and, therefore, well aware of the importance of research and development grants. I recognise the importance of regulating the provision by public authorities of subsidies that may be distorting or harmful.

I had thought that Clause 49 makes it clear that financial assistance for economic development may be provided in a number of forms, including grants. However, I sympathise with my noble friend’s view, which she clearly explained in her impressive speech, that R&D grants should be incorporated to safeguard against unfair state aid masquerading as legitimate subsidies. I would like to hear the opinion of my noble friend the Minister on this question.

Regarding the proposal of the noble and learned Lord, Lord Thomas of Cwmgiedd, that Clause 50 should not stand part of the Bill, although I have the greatest respect for his opinions and was impressed by his characteristically clear explanation of his reasons, I believe it is still necessary for this clause to protect against the undesirable possibility that the devolved authorities might otherwise adopt significantly different regulations on this. I look forward to hearing what my noble friend the Minister has to say about this amendment and the need for a single nationwide state aid regime.

[The Deputy Chairman of Committee (Lord Alderdice) (LD)]

The noble Baronesses, Lady Bowles of Berkhamsted and Lady Neville-Rolfe, have withdrawn, so I call the noble Lord, Lord Fox.