All 20 contributions to the United Kingdom Internal Market Act 2020 (Ministerial Extracts Only)

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Mon 14th Sep 2020
United Kingdom Internal Market Bill
Commons Chamber

2nd reading & 2nd reading & 2nd reading: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons & 2nd reading & Programme motion & Money resolution
Tue 29th Sep 2020
United Kingdom Internal Market Bill
Commons Chamber

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage & Report stage: House of Commons & Report stage & 3rd reading
Mon 19th Oct 2020
United Kingdom Internal Market Bill
Lords Chamber

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tue 20th Oct 2020
United Kingdom Internal Market Bill
Lords Chamber

2nd reading (Hansard) & 2nd reading (Hansard)
Mon 26th Oct 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee stage & Committee stage:Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Wed 28th Oct 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee stage:Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Mon 2nd Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee stage:Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Wed 4th Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee stage:Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Mon 9th Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee stage:Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Wed 18th Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Report stage & Report stage:Report: 1st sitting & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Mon 23rd Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Report stage:Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Wed 25th Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Report stage:Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wed 2nd Dec 2020
United Kingdom Internal Market Bill
Lords Chamber

3rd reading (Hansard) & 3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Mon 7th Dec 2020
United Kingdom Internal Market Bill
Commons Chamber

Consideration of Lords amendmentsPing Pong & Consideration of Lords amendments & Ping Pong & Ping Pong: House of Commons
Wed 9th Dec 2020
United Kingdom Internal Market Bill
Lords Chamber

Consideration of Commons amendmentsPing Pong (Hansard) & Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Thu 10th Dec 2020
United Kingdom Internal Market Bill
Commons Chamber

Consideration of Lords amendmentsPing Pong & Consideration of Lords amendments
Mon 14th Dec 2020
United Kingdom Internal Market Bill
Lords Chamber

Consideration of Commons amendmentsPing Pong (Hansard) & Consideration of Commons amendments
Tue 15th Dec 2020
United Kingdom Internal Market Bill
Lords Chamber

Consideration of Commons amendmentsPing Pong (Hansard) & Consideration of Commons amendments
Tue 15th Dec 2020
United Kingdom Internal Market Bill
Commons Chamber

Consideration of Lords amendmentsPing Pong & Consideration of Lords amendments
Wed 16th Dec 2020
United Kingdom Internal Market Bill
Commons Chamber

Consideration of Lords amendmentsPing Pong & Consideration of Lords amendments

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

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2nd reading & 2nd reading: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons
Monday 14th September 2020

(3 years, 6 months ago)

Commons Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Notices of Amendments as at 11 September 2020 - (14 Sep 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Lindsay Hoyle Portrait Mr Speaker
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I inform the House that the amendment in the name of Keir Starmer has been selected.

Boris Johnson Portrait The Prime Minister (Boris Johnson)
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I beg to move, That the Bill be now read a Second time—and that this House act to preserve one of the crucial achievements of the past three centuries, namely our British ability to trade freely across the whole of these islands.

The creation of our United Kingdom by the Acts of Union of 1707 and 1801 was not simply a political event, but an act of conscious economic integration that laid the foundations for the world’s first industrial revolution and the prosperity we enjoy today. When other countries in Europe stayed divided, we joined our fortunes together and allowed the invisible hand of the market to move Cornish pasties to Scotland, Scottish beef to Wales, Welsh beef to England, and Devonshire clotted cream to Northern Ireland or wherever else it might be enjoyed.

When we chose to join the EU back in 1973, we also thereby decided that the EU treaties should serve as the legal guarantor of these freedoms. Now that we have left the EU and the transition period is about to elapse, we need the armature of our law once again to preserve the arrangements on which so many jobs and livelihoods depend. That is the fundamental purpose of this Bill, which should be welcomed by everyone who cares about the sovereignty and integrity of our United Kingdom.

We shall provide the legal certainty relied upon by every business in our country, including, of course, in Northern Ireland. The manifesto on which this Government were elected last year promised business in Northern Ireland

“unfettered access to the rest of the UK”.

Stephen Doughty Portrait Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
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I am listening carefully to what the Prime Minister is saying, but why did one of his own distinguished Members describe his policy this week as “Nixonian Madman Theory”? Is the Prime Minister not deeply worried that his policies and approach are being compared to those of the disgraced former US President Richard Nixon, rather than someone like Winston Churchill?

Boris Johnson Portrait The Prime Minister
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Actually, I think that this Bill is essential for guaranteeing the economic and political integrity of the United Kingdom and simply sets out to achieve what the people of this country voted for when they supported our election manifesto: not only unfettered access from NI to GB and from GB to NI, but also—I quote from the manifesto—to

“maintain and strengthen the integrity and smooth operation of our internal market.”

Wes Streeting Portrait Wes Streeting (Ilford North) (Lab)
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Will the Prime Minister give way?

Boris Johnson Portrait The Prime Minister
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I will not.

The Bill is designed to honour that pledge and maintain those freedoms. When we renegotiated our withdrawal agreement from the EU, we struck a careful balance to reflect Northern Ireland’s integral place in our United Kingdom, while preserving an open border with Ireland, with the express and paramount aim of protecting the Belfast/Good Friday agreement and the peace process. In good faith, we accepted certain obligations in the Northern Ireland protocol in order to give our European friends the assurances they sought on the integrity of their single market, while avoiding any change to the border on the island of Ireland. We agreed to conduct some light-touch processes on goods passing between Great Britain and Northern Ireland, in case they were transferred to the EU.

Boris Johnson Portrait The Prime Minister
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I give way to the hon. Gentleman, who knows a great deal about the subject.

Jim Shannon Portrait Jim Shannon
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This is a very important debate, as the Prime Minister and I know and as everyone in the House knows. Does he accept that the EU’s determination to use Northern Ireland as a stick to beat the UK with as punishment for daring to leave an institution that had no respect or concern for our people has been underlined by the behaviour of MEPs, and indeed of some in this House, as they seek again, against the will of the majority of people, to stop Brexit instead of doing the honourable thing: respecting the vote and the recent general election validation, taking care of the UK and putting our people first, as the Prime Minister has said he will do? This legislation is a way of doing that.

Boris Johnson Portrait The Prime Minister
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The intention of the Bill is clearly to stop any such use of the stick against this country, and that is what it does. It is a protection, it is a safety net, it is an insurance policy, and it is a very sensible measure.

In a spirit of reasonableness, we are conducting these checks in accordance with our obligations. We are creating the sanitary and phytosanitary processes required under the protocol and spending hundreds of millions of pounds on helping traders. Under this finely balanced arrangement, our EU friends agreed that Northern Ireland—this is a crucial point—would remain part of the customs territory of the United Kingdom, able to benefit from free trade deals with other countries, which we are now beginning to strike. It ensures that the majority of goods not at risk of travelling to the EU—and that is the majority of goods going from GB to Northern Ireland—do not have to pay tariffs.

But the details of this intricate deal and the obvious tensions between some of its provisions can only be resolved with a basic minimum of common sense and good will from all sides. I regret to have to tell the House that in recent months the EU has suggested that it is willing to go to extreme and unreasonable lengths, using the Northern Ireland protocol in a way that goes well beyond common sense simply to exert leverage against the UK in our negotiations for a free trade agreement. To take the most glaring example, the EU has said that if we fail to reach an agreement to its satisfaction, it might very well refuse to list the UK’s food and agricultural products for sale anywhere in the EU. It gets even worse, because under this protocol, that decision would create an instant and automatic prohibition on the transfer of our animal products from Great Britain to Northern Ireland. Our interlocutors on the other side are holding out the possibility of blockading food and agricultural transports within our own country.

Andrea Jenkyns Portrait Andrea Jenkyns (Morley and Outwood) (Con)
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Does the Prime Minister agree that there is no greater obligation for MPs than to our voters, that the British people were told that no deal is better than a bad deal and we would prosper without a deal, and that given that the EU refuses to negotiate in good faith, we have no alternative but to legislate to protect our internal market?

Boris Johnson Portrait The Prime Minister
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My hon. Friend is entirely right. Absurd and self-defeating as that action would be, even as we debate this matter, the EU has not taken that particular revolver off the table. I hope that it will do so and that we can reach a Canada-style free trade agreement as well.

It is such an extraordinary threat, and it seems so incredible that the EU could do this, that we are not taking powers in this Bill to neutralise that threat, but we obviously reserve the right to do so if these threats persist, because I am afraid that they reveal the spirit in which some of our friends are currently minded to conduct these negotiations. It goes to what m’learned friends would call the intention of some of those involved in the talks. I think the mens rea—

Boris Johnson Portrait The Prime Minister
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I give way to my right hon. and learned Friend.

Robert Neill Portrait Sir Robert Neill
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I never object to another promotion.

I have listened carefully to what the Prime Minister says, but does he accept that were our interlocutors in the EU to behave in such an egregious fashion, which would clearly be objectionable and unacceptable to us, there is already provision under the withdrawal agreement for an arbitrary arrangement to be put in place? Were we to take reserve powers, does he accept that those reserve powers should be brought into force only as a final backstop if we have, in good faith, tried to act under the withdrawal agreement and are then frustrated? The timing under which they come into force is very important for our reputation as upholders of the rule of law.

Boris Johnson Portrait The Prime Minister
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My hon. Friend is absolutely right in what he says. He knows a great deal about this matter, and it is of great importance that we go through the legal procedures, as we will. As things stand, however, in addition to the potential blockade on agricultural goods, there are other avenues that the EU could explore if it is determined to interpret the protocol in absurd ways, and if it fails to negotiate in good faith. We must now take a package of protective powers in the Bill, and subsequently.

For example, there is the question of tariffs in the Irish sea. When we signed the protocol, we accepted that goods “at risk” of going from Great Britain into the EU via Northern Ireland should pay the EU tariff as they crossed the Irish sea—we accepted that—but that any goods staying within Northern Ireland would not do so. The protocol created a joint committee to identify, with the EU, which goods were at risk of going into Ireland. That sensible process was one achievement of our agreement, and our view is that that forum remains the best way of solving that question.

I am afraid that some in the EU are now relying on legal defaults to argue that every good is “at risk”, and therefore liable for tariffs. That would mean tariffs that could get as high as 90% by value on Scottish beef going to Northern Ireland, and moving not from Stranraer to Dublin but from Stranraer to Belfast within our United Kingdom. There would be tariffs of potentially more than 61% on Welsh lamb heading from Anglesey to Antrim, and of potentially more than 100% on clotted cream moving from Torridge—to pick a Devonshire town at random—to Larne. That is unreasonable and plainly against the spirit of that protocol.

The EU is threatening to carve tariff borders across our own country, to divide our land, to change the basic facts about the economic geography of the United Kingdom and, egregiously, to ride roughshod over its own commitment under article 4 of the protocol, whereby

“Northern Ireland is part of the customs territory of the United Kingdom.”

We cannot have a situation where the boundaries of our country could be dictated by a foreign power or international organisation. No British Prime Minister, no Government, and no Parliament could ever accept such an imposition.

Sarah Dines Portrait Miss Sarah Dines (Derbyshire Dales) (Con)
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How will my right hon. Friend ensure that Derbyshire Dales lamb, grown in our country, can be enjoyed by our fellow citizens in Northern Ireland, which is part of our country?

Boris Johnson Portrait The Prime Minister
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I thank my hon. Friend very much. The best way for us all to be sure that such lamb can be sold throughout the whole United Kingdom is to vote for this Bill, and to protect the economic integrity of the UK. [Interruption.] To answer the questions that are being shouted at me from a sedentary position, last year we signed the withdrawal agreement in the belief, which I still hold, that the EU would be reasonable. After everything that has recently happened, we must consider the alternative. We asked for reasonableness, common sense, and balance, and we still hope to achieve that through the joint committee process, in which we will always persevere, no matter what the provocation.

Jeremy Wright Portrait Jeremy Wright (Kenilworth and Southam) (Con)
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I am grateful to my right hon. Friend for giving way, and I want to ask him, if I may, about the ministerial code. When I was the Attorney General in the previous Government, I was happy to confirm that the ministerial code obliged Ministers to comply with international as well as domestic law. This Bill will give Ministers overt authority to break international law. Has the position on the ministerial code changed?

Boris Johnson Portrait The Prime Minister
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No, not in the least. My right hon. and learned Friend can consult the Attorney General’s position on that. After all, what this Bill is simply seeking to do is insure and protect this country against the EU’s proven willingness—that is the crucial point—to use this delicately balanced protocol in ways for which it was never intended.

The Bill includes our first step to protect our country against such a contingency by creating a legal safety net taking powers in reserve, whereby Ministers can guarantee the integrity of our United Kingdom. I understand how some people will feel unease over the use of these powers, and I share that sentiment. I say to my right hon. and learned Friend that I have absolutely no desire to use these measures. They are an insurance policy, and if we reach agreement with our European friends, which I still believe is possible, they will never be invoked. Of course, it is the case that the passing of this Bill does not constitute the exercising of these powers.

Boris Johnson Portrait The Prime Minister
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If the powers were ever needed, Ministers would return to this House with a statutory instrument on which a vote—perhaps this is the question to which the hon. Gentleman is awaiting an answer—would be held. We would simultaneously pursue every possible redress—to get back to the point I was making to my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill)—under international law, as provided for in the protocol.

In addition to our steps in domestic law, if we had to make clear that we believed the EU was engaged in a material breach of its duties of good faith, as required and provided for under the withdrawal agreement and the Vienna convention on the law of treaties, we would seek an arbitration panel and consider safeguards under article 16 of the protocol.

It is a question not of if we meet our obligations, but of how we fulfil them. We must do so in a way that satisfies the fundamental purpose of the protocol, the Belfast Good Friday agreement and the constitutional position of Northern Ireland. We will work with the EU on all of these issues. Even if we have to use these powers, we will continue to engage with the joint committee so that any dispute is resolved as quickly and as amicably as possible, reconciling the integrity of the EU single market with Northern Ireland’s place in the UK’s customs territory.

What we cannot do now is tolerate a situation where our EU counterparts seriously believe that they have the power to break up our country. If that is what hon. Members on the Opposition Benches want them to have, then I am afraid that they are grievously mistaken. That illusion must be decently dispatched, and that is why these reserve powers are enshrined in the Bill.

In addition, the Bill will help deliver the single biggest transfer of powers to the devolved Administrations since their creation, covering a total of 160 different policy areas. Each devolved Administration will also be fully and equally involved in the oversight of the UK’s internal market through a new independent body, the Office for the Internal Market. The Bill will maintain our common cause of high standards, where we already go beyond the EU in areas ranging from health and safety to consumer and environmental protections.

Chris Bryant Portrait Chris Bryant
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May I take the Prime Minister back to the question asked by the former Attorney General, the right hon. and learned Member for Kenilworth and Southam (Jeremy Wright)? It seems to me quintessential to the way we do our business that Ministers abide by the law. Indeed, the Justice Secretary is required by law to swear that he will uphold the rule of law. How, therefore, can the Prime Minister seriously advance a piece of legislation that says:

“regulations…are not to be regarded as unlawful on the grounds of any incompatibility or inconsistency with relevant international or domestic law”.

That is just gobbledegook, isn’t it? It is complete and utter nonsense.

Boris Johnson Portrait The Prime Minister
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I do not know whether the hon. Gentleman was listening, but I made it very clear that we do not relish the prospect of having to use these powers at all. We hope very much, as I said, that the EU will be reasonable, but any democratically elected Government of this country—indeed, I would say any MP representing the people of this country—must be obliged to do whatever he or she can to uphold the territorial integrity of this country. That is what we are doing. Furthermore, instead of UK taxpayers’ money being disbursed by the EU, this Bill, which is an excellent Bill, will allow the Government to invest billions of pounds across the whole of the UK to level up.

A year ago, this Parliament was deadlocked, exasperating the British people by its failure to fulfil their democratic wishes and, worst of all, by undermining our negotiators, as the right hon. Member for Leeds Central (Hilary Benn) will recall. Effectively, Parliament told the EU that if it played hardball, this House would oblige it by weakening our country’s hand and legally forbid our representatives from walking away from the negotiating table. I hope that this House will never make that mistake again. Instead, let us seize the opportunity presented by this Bill and send a message of unity and resolve. Let us say together to our European friends that we want a great future relationship and a fantastic free trade deal.

Steve Brine Portrait Steve Brine (Winchester) (Con)
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The Prime Minister will remember that we have some history in this regard. I did not want us to leave with no agreement last year, and we fell out over that. But he was true to his word and we had an agreement.

We said in our manifesto:

“We will ensure that Northern Ireland’s businesses and producers enjoy unfettered access to the rest of the UK”.

Is it not the truth of the matter that the way to do that is either through this Bill or by agreeing the free trade agreement—the Canada-style deal—that the EU said was on the table and of which the Prime Minister said when he came into office, “Okay, they now seem to have stepped back from that”?

I thank the Prime Minister for saying that tonight is difficult for some of us, but this is an important piece of legislation. Will he assure me that it is still his policy and the policy of his Government to secure that FTA with the EU that it said it wanted and that we know we want?

Boris Johnson Portrait The Prime Minister
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I thank my hon. Friend for the spirit in which he asked his question and made that important point. He is absolutely right to focus on where we are now in our talks on the free trade agreement. It is by passing the Bill tonight and in subsequent days that we will make the possibility of that great free trade agreement more real and get it done sooner.

Therefore, with this Bill we will expedite a free trade agreement not only with our European friends and partners, but with friends and partners around the world; we will support jobs and growth throughout the whole United Kingdom; we will back our negotiators in Brussels; and, above all, we will protect the territorial integrity of the UK and the peace process in Northern Ireland. I urge the House to support the Bill and, as my hon. Friend the Member for Winchester (Steve Brine) rightly said, to get back to the business of securing a free trade agreement with our closest neighbours that we would all wish to see. I commend the Bill to the House.

--- Later in debate ---
Ian Blackford Portrait Ian Blackford
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The right hon. Member makes a very good point. There are policies that we are very proud of introducing in Scotland, such as minimum alcohol pricing, which was so critical in dealing with misuse of alcohol in Scotland, but there is no guarantee that we would be able to bring in such initiatives in the future. We would have to go cap in hand to Westminster for authority. The days of us being “too wee, too poor, too stupid” are well and truly over.

Ian Blackford Portrait Ian Blackford
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The sneering contempt that we get from the Minister for the Cabinet Office—he really ought to be ashamed of himself.

In part four, provision is made for the establishment of a new unelected monitoring body called the Office for the Internal Market. The Bill proposes to hand that unelected body—we often hear about unelected bureaucrats, but here we are—the power to pass judgment on devolved laws, directly over the heads of the Scottish people’s chosen Government. It will also lead to an open invitation for businesses with deep pockets to challenge the democratic decisions of our Scottish Parliament.

Clause 48 reserves state aid: one of the most blatant power grabs in the Bill, and that is a very high bar. We know that the state aid provisions will merely mirror those of the World Trade Organisation. That will inevitably make a deal with the EU even more difficult and provide little or no scrutiny. Finally, there is clause 46: the ultimate insult and the ultimate attack on devolution. If this legislation is forced through, powers will be given to UK Government Ministers to design and impose replacements for EU spending programmes in devolved areas: infrastructure, economic development, culture and sport, education and training—all of it.

The Government’s agenda is clear. The Transport Minister would have input and decision-making powers over road building in Scotland, over the heads of the Scottish Parliament. We won a referendum in 1997, when 75% of the people of Scotland voted to have a Parliament. We have elections every five years. Manifestos are put in front of the Scottish people. It is the settled will of the people that that Parliament has control over health, education, housing and transport. How dare this Tory Government feel that they can come in and impose their will on those areas of democratic accountability in Scotland? What an insult to our Parliament in Edinburgh and our Parliament in Wales. I say to this Government, “We will stand up against this attack on our Parliament, and on those that enshrined that Scottish Parliament.”



The agenda of the Conservatives is clear. The Tories will seek to bypass democratically elected MPs and Ministers in Scotland. Union Jack-badged projects will be paid for and prioritised ahead of the priorities of our Parliament. Bitter experience is a good teacher. Tory Governments cannot be trusted to spend money in Scotland.

We remember what happens when the Tories control state aid spending. In 1992, John Major’s Government diverted cash from the highlands to try to boost dwindling Tory support in south-east England. And we have not forgotten that this legislation comes from a Prime Minister who bragged that a pound spent in Croydon has far more value to the country than a pound spent in Strathclyde. That is the way that the Conservatives look upon Scotland. The Tories will look after their own interests. They will never—not ever—support Scotland’s interests. This Bill would allow them free rein to serve their own narrow needs.

At its heart, this Bill confirms the centralising obsession of this UK Government. Those in No. 10 who not so long ago made a lucrative living scribbling endless newspaper articles about a supposed centralised Brussels elite are now attempting to centralise and grab every devolved power that they can get their hands on. Apparently, the Tories are not only determined to preside over the death of devolution; they are clearly determined to oversee the death of irony, too.

The real reason behind this Government’s hunger to pursue this power grab is what should concern us most, though. Paragraph 26 of the explanatory notes makes it clear that the Business Secretary will be given the power to change exemptions from the Bill at any time. In effect, this is a Trojan horse allowing Tory Ministers to encroach even further on devolution, and we know where that will inevitably lead. In order to deliver bad trade deals—the only deals they can now realistically get—the Tories want private health companies to have a guaranteed right to trade unhindered in Scotland and across the UK. With no protections for our Parliament, this would fundamentally weaken and undermine our national health service in Scotland. The same is true for private water companies, with the same threat of undermining standards and raising prices in Scotland. The Tories’ real agenda is about imposing the creeping privatisation and rampant deregulation that they are already implementing in England.

I am heartened by one thing: the scale of the threat of this legislation is equalled by the scale of the opposition with which it has been met across Scottish society. Those on the Government Benches, especially the Scottish Tories—mind you, there is only one of them in here—would do well to listen to this. The National Farmers Union Scotland confirmed that

“the proposals pose a significant threat to the development of Common Frameworks and to devolution.”

The chair of the Scottish Crofting Federation, Yvonne White, expressed fear that

“the proposed legislation will lead to a race to the bottom, threatening our high standards in food, environment and animal welfare, thus damaging the image of Scottish produce.”

She concluded:

“These standards are best safeguarded by the Scottish Parliament.”

[Interruption.] I hear someone shouting from a sedentary position, “Don’t let the facts get in the way.” That is a statement from the chair of the Scottish Crofting Federation. It might not suit those on the Tory Benches, but that is the reality.

The Scottish Council for Development and Industry believes that

“mutually agreed common frameworks should be the foundation of the UK internal market, rather than the imposition of a single approach across the UK in devolved policy areas.”

The SCDI is absolutely right. Why is the Joint Ministerial Committee not finishing the work it was engaged on in delivering those frameworks on a consensual basis? But of course that does not suit the Tory Government, who want to attack our democratic institutions.

The General Teaching Council for Scotland said that supporting the Bill

“would undermine the four UK nations’ devolved education functions.”

Ian Blackford Portrait Ian Blackford
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I hear the Cabinet Office Minister shout, “How?” Perhaps he should go and talk to the General Teaching Council, and it will give him its views directly. [Interruption.] Really? We have the Business Secretary, who is supposed to be taking this Bill through, sitting laughing—laughing at the legitimate comments made by stakeholders in Scotland. It is little wonder that the Tories are rejected in the way they are at the polls in Scotland.

On its impact on devolution, Professor Nicola McEwen, co-director of the Centre on Constitutional Change, found that the internal market Bill

“limits policy divergences and risks stifling innovation”.

The Scottish Trades Union Congress stated that the Prime Minister

“is uniting political parties, trade unions and wider civil society in Scotland against a power grab which would see UK Government interference in previously devolved matters and a rolling back of the”

devolution

“settlement we voted for in 1997”.

What is happening is that the Tories are uniting civic Scotland against this attack on our Parliament and its powers—farmers, crofters, teachers, industry, academics and trade unions: a coalition of opposition to this Bill and this Tory agenda. Civic Scotland has made its voices and views crystal clear. Anyone supporting this Bill will be ignoring their interests.

We all have a responsibility to listen to these voices. The new Scottish Tory leadership have been running around half the summer, telling anyone who would listen just how keen they were to stand up to the Prime Minister when they think he is wrong. Well, you have that chance tonight. Listen to the coalition of opposition in Scotland rather than your masters in Downing Street. If the Scottish Tories follow their colleagues into the Lobby in support of this power grab, they will expose themselves as being weaker than ever, as failing to stand up for Scotland’s interest against a London power grab. The very first test of the new Scottish Tory leadership will have turned out to be their biggest, and they will have failed. They will simply have shown themselves to be the Prime Minister’s poodles, turning their back on Scotland’s interests. They will have failed once again to stand up for Scottish democracy.

There is also a special responsibility that falls on the Labour party. Much of the devolution project is a legacy of its Government in 1997. This Bill is a direct attack on that legacy. We must collectively oppose the Bill. I am urging the Labour party at every parliamentary stage to take full responsibility and work collectively with us to hold the Government to account. The Welsh Labour Government are advising the same. They have said that

“the UK Government plans to sacrifice the future of the union by stealing powers from devolved administrations”,

and that it is

“an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland, who have voted in favour of devolution on numerous occasions.”

That statement and its analysis comes to the very core of the argument. Over the course of the last 21 years of devolution, Scotland’s people have benefited from the progressive and divergent priorities that our own governance has given us the freedom to pursue. They have seen it, experienced it and come to fiercely value it. Even with limited powers, Scotland’s Parliament and our Government have always sought to mitigate or reject the Conservative policy paths set out at Westminster. We have forged our own path. If this legislation had been in force previously, it would have prevented many progressive policies and divergent choices.

Over recent months, that conviction and belief in our Parliament has grown. People have seen the exceptional leadership of our First Minister throughout the course of this terrible pandemic. It has reaffirmed their faith and confidence in our institutions, our governance and our nation. Our people have come to a simple but powerful conclusion: decisions about Scotland are best made in Scotland. Right now, poll after poll—the latest one only last Friday—shows that a growing majority have come to the conclusion that all decisions and all powers should now be fully entrusted to the people of Scotland.

The Tories have never been able to reconcile themselves to that truth. As usual, when they are confronted with change, they are in the depths of denial. Instead of accepting the right of Scottish people to choose their own future, they are trying to grab the powers back that were returned to Scotland 21 years ago. That is exactly what this law is designed to do. It is a full-frontal attack on Scotland’s Parliament and on Scotland’s democracy.

It has been stated that power devolved is power retained. This implies that this Tory Government can do anything they like with the powers of our Parliament. That is what this Bill is about. It gives them direct spending in Scotland in devolved areas: in health, education, housing and transport. Just dwell on this. We send parliamentarians to Holyrood so that they can enact the people’s priorities, but Westminster is about to ride roughshod over that. If the Bill passes, this Government in London can interfere directly in all those devolved areas, over the heads of the Scottish Parliament and our people. There is only one way to stop them—only one answer, and only one option.

The only way to defend Scotland’s Parliament and its powers is by becoming independent. Our Parliament will consider a new referendum Bill before the end of 2021. The chance to choose an independent future is now coming. No amount of Tory denial and disruption can stand in the way of Scotland’s people’s democratic right to choose a different and better future, and once it comes, people will have their democratic say. I am more confident than ever that they will choose to be part of a new Scotland back at the heart of Europe. We can choose to leave behind the chaos and instability of Westminster. We can get on by becoming an independent, international, law-abiding nation.

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Michael Gove Portrait The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Michael Gove)
- Hansard - - - Excerpts

It is always a pleasure to follow the hon. Member for Leeds West (Rachel Reeves), who always makes her case with clarity, with force and from principle. I know that everyone who listened to her speech will have recognised the powerful case that she was making. I did not agree with everything that she said, but I am sure everyone in the House recognises that she is a strong and effective advocate for her party and her principles.

I thank all those who spoke in this debate. We had more than 60 speeches, all of them I think contributing to the reputation of this House. We had very thoughtful speeches of course from a variety of Select Committee Chairs and also some very passionate speeches, including, as the hon. Lady mentioned, from the hon. Member for Foyle (Colum Eastwood) and the right hon. Member for East Antrim (Sammy Wilson). Those two representatives of Northern Ireland constituencies took passionately different views on the merits of this legislation. It is that very passion and, indeed, the importance of democracy, not just to Northern Ireland but to the whole United Kingdom, that means we should all try to look calmly at the Bill before voting tonight and before looking at the various amendments that may be tabled in Committee.

It is important that I remind the House of what the Bill does and what it does not do, as well has how, together, we can address the legitimate concerns that have been raised in good faith by hon. Members. The Bill protects, enhances and strengthens our Union and the prosperity of all our people. It is all the more crucial that we take these steps as we recover from the dreadful covid-19 pandemic. We need to work together as one United Kingdom, displaying solidarity and resolve, to ensure that the prosperity that we generate is shared for all the people we represent. It is a fact that each of the parts of the United Kingdom trade more with each other than with anyone else. It is a fact that each of the peoples of the United Kingdom rely more on each other than anyone else. All the peoples of the United Kingdom are stronger when we work together, act together and stick together.

No one summed up the essence of the Bill better than my hon. Friend the Member for Moray (Douglas Ross). He said it is a Bill about jobs and businesses. As he reminded us, some 545,000 jobs in Scotland rely on the integrity of our internal market. He reminded us that, coincident with this Bill, there is a power surge for all the devolved Administrations, with hundreds of powers going to the devolved Assemblies to strengthen devolution. He also stressed that the importance of devolution was that all our citizens could see our Governments working together—the United Kingdom Government working with the Northern Ireland Executive, the Senedd in Wales and, of course, the Scottish Government.

Michael Gove Portrait Michael Gove
- Hansard - - - Excerpts

Not at this stage.

The Bill does not walk away from negotiations with the European Union. Those negotiations go on with David Frost and Michel Barnier and with myself and my friend Maroš Šefčovič in the Joint Committee. We are committed to making a success of the negotiations. The Bill is not about abandoning the withdrawal agreement. The withdrawal agreement is there. We are safeguarding the rights of 3 million EU citizens in the UK, just as EU nations are safeguarding the rights of 1 million UK citizens in the EU.

The Bill is certainly not about declining to implement the Northern Ireland protocol. As the right hon. Member for East Antrim reminded us, with some regret on his part, we are erecting border-inspection posts for sanitary and phytosanitary checks in Northern Ireland, even now. We are investing hundreds of millions of pounds in helping Northern Ireland businesses to be ready for the new processes that come with the protocol. If we were not serious about implementing the protocol, we would not be incurring the inevitable resistance, from some, as we see those border-inspection posts erected and traders being prepared for the implementation of the protocol. The idea that we are abandoning it is simply for the birds.

The Bill is also not a threat to devolution. I must turn to my old friend, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford). He gave the longest speech in this debate and, like all his speeches, it was true to the John Lewis guarantee: no argument was knowingly undersold. In his gusto to make his arguments and the lyricism with which he made his case, I fear he obscured one or two details. He talked about the threat to water in Scotland, but the Bill and the schedule are clear that water is excluded from the provisions of the Bill. He talked about the threat to the NHS, a UK institution, but if we look at the schedule to the Bill, we see that healthcare services are excluded.

I am perfectly happy to spend more time with the right hon. Gentleman, because it is always a pleasure to take him through the Bill, to calm him and to point out the ways in which it not only strengthens the Union but respects devolution. And devolution is what, indeed, it does respect—

Alison Thewliss Portrait Alison Thewliss (Glasgow Central) (SNP)
- Hansard - - - Excerpts

Will the right hon. Gentleman give way?

Michael Gove Portrait Michael Gove
- Hansard - - - Excerpts

No.

The other thing about the right hon. Member for Ross, Skye and Lochaber is that sometimes in his speeches he employs the Humpty Dumpty principle: a word means what he wants it to mean, whatever else the rest of us understand by it. He talked about defending devolution; well, what is devolution? It is two Governments working together—the Scottish Government and the UK Government; the Welsh Government and the UK Government. He says he wants to protect devolution, but how does he want to do that? By going for independence, smashing the devolution settlement, separating this family of nations and undermining the prosperity of the people who he and I love in Scotland. Even though he spoke at length, and lyrically, when he was challenged he could not give one single example of any power that the Scottish Government or the Scottish Parliament currently has that is not being retained. Indeed, powers are increasing.

Let me turn briefly to the speech given by the shadow Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for Doncaster North (Edward Miliband). I think we can all agree that it was an excellent speech. He raised a number of legitimate concerns and fair questions, which I hope to address. He talked about the importance of common frameworks, and we agree on that, which is why progress has been made on them. Indeed, one of those common frameworks specifically covers food standards and provides reassurance that the fears that he and others have about a race to the bottom will not be realised. It is also the case, as is acknowledged widely, including in his speech, that common frameworks are important but they are not enough. Progress on common frameworks is a good thing, but we also need legislation to underpin the internal market overall. I also noted his passionate commitment in his speech to getting Brexit done, and I am pleased to welcome him to the ranks of born-again Brexiteers.

One thing the right hon. Gentleman will know—indeed, the Chairman of the Select Committee on the future relationship with the European Union, the right hon. Member for Leeds Central (Hilary Benn), repeated the point—is that the EU has not always been the constructive partner that all of us might have hoped. In excellent speeches, my hon. Friend the Member for South Thanet (Craig Mackinlay), my right hon. Friend the Member for Basingstoke (Mrs Miller) and my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) pointed out that the EU has not always done what we might have hoped it would do. The EU is bound by a system of what are called autonomous processes to ensure that we have equivalence on data and financial services, and that we are listed as a third country for the export of food and other products of animal origin. There has been no progress on any of those. We were told that we would get a Canada deal, but that is not on the table. The Prime Minister has reminded us that the threat on third country listing could mean an embargo on the transport of goods from Great Britain to Northern Ireland. The EU has also insisted on an interpretation of an end to the common fisheries policy that would mean that they could carry on fishing in our waters just as before, even though we had pledged to take back control. I am not a diplomat but let me try to put it in diplomatic language: some people might think that the EU had not been negotiating absolutely 100% in line with what all of us might have hoped. Given that, it is important that we redouble our efforts to seek agreement but that we are also prepared for any eventuality.

Importantly, it is not just me who acknowledges that the EU might not have been doing everything it should to secure agreement. As I say, the Chairman of the Select Committee made the point that there is no need for exit declarations for goods coming from Northern Ireland to Great Britain. He made the point that it is a shame that we have not got third country listing, and I agree with him—and I agree with the hon. Member for Leeds West that the EU must up its game.

It is also crucial that we recognise what this Bill seeks to do in order to ensure that we can get an appropriate resolution, and here I turn to the remarks made by my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill). He is an old friend of mine and he is on to something here. He made the point that we need to show that we are operating in a constructive spirit, and I agree. That is why we want to secure agreement through the Joint Committee, which is why we met last week. It is why Maroš Šefčovič and I have been working, setting aside our differences, in order to achieve agreement. It is also why our first recourse will be to the arbitral panel if we do have problems. We recognise, as my hon. Friend pointed out, that if we cannot secure agreement, under section 16 there are steps we can take in extremis, as a safety net, to ensure that our interests are protected. It is the case in international law that we can take those steps, if required, in order to achieve the goals we wish.

Tom Tugendhat Portrait Tom Tugendhat (Tonbridge and Malling) (Con)
- Hansard - - - Excerpts

My right hon. Friend is making some clear points. Will he make it absolutely clear that any breach of the withdrawal agreement will come only at the very end of a long process, at which point the only resolution in respect of keeping food flowing between GB and Northern Ireland is this Bill?

Michael Gove Portrait Michael Gove
- Hansard - - - Excerpts

My hon. Friend, the Chairman of the Foreign Affairs Committee, makes an important point. It is the case that patient negotiation is the way forward. [Interruption.] No, I entirely agree with him. This time last year, we and the EU were at loggerheads. There were obstacles and roadblocks, but we negotiated with rigour, with determination and not without some bumps in the road in order to achieve progress. If we apply the same determination now as we did then, I believe that we can make progress in these negotiations, but just as last year, when we were ready to support our Prime Minister in showing steely resolve to get the best possible deal and to make sure that our negotiators had everything that they needed, so now we must back our Prime Minister and our negotiators and recognise that this safety net is a critical part of making sure that we can achieve everything that we wish. We should support the Bill this evening.

Question put, That the amendment be made.

--- Later in debate ---
22:00

Division 93

Ayes: 213


Labour: 195
Liberal Democrat: 11
Plaid Cymru: 3
Independent: 1
Alliance: 1
Green Party: 1
Conservative: 1

Noes: 349


Conservative: 340
Democratic Unionist Party: 7
Independent: 1

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
22:15

Division 94

Ayes: 340


Conservative: 329
Democratic Unionist Party: 7
Independent: 1

Noes: 263


Labour: 197
Scottish National Party: 47
Liberal Democrat: 11
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Conservative: 2
Independent: 1
Alliance: 1
Green Party: 1

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
22:30

Division 95

Ayes: 343


Conservative: 335
Democratic Unionist Party: 7
Independent: 1

Noes: 49


Scottish National Party: 45
Plaid Cymru: 2
Independent: 1

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Tuesday 29th September 2020

(3 years, 6 months ago)

Commons Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 29 September 2020 - (29 Sep 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Nigel Evans Portrait Mr Deputy Speaker
- Hansard - - - Excerpts

With this it will be convenient to consider the following:

Government new clause 5—Office for the Internal Market panel and task groups.

New clause 1—Withdrawal Agreement and rule of law duty

‘(1) An appropriate authority exercising any function to which this Part (Northern Ireland Protocol) applies must—

(a) respect the rule of law;

(b) allow for the possibility of judicial review of an enactment, decision, act or omission by the appropriate authority;

(c) use the provisions of Article 16 of the Protocol to protect the interests of the United Kingdom.

(2) An appropriate authority exercising any function to which this Part applies must comply with the obligations of the United Kingdom under international law.

(3) An appropriate authority exercising any function to which this Part applies must comply with—

(a) the requirement under Article 5 (Good faith) of the Withdrawal Agreement for the EU and the United Kingdom to assist each other in full mutual respect and good faith to carry out the tasks which flow from the Agreement;

(b) the requirement under Article 167 (Consultations and communications within the Joint Committee) for the EU and the United Kingdom to endeavour to resolve any dispute regarding the interpretation and application of the provisions of the Agreement by entering into consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution;

(c) the requirement under Article 184 (Negotiations on the future relationship) of the Withdrawal Agreement for the EU and the United Kingdom to use their best endeavours, in good faith and in full respect of their respective legal orders, to take the necessary steps to negotiate expeditiously the agreements governing their future relationship referred to in the Political Declaration of 17 October 2019 and to conduct the relevant procedures for the ratification or conclusion of those agreements, with a view to ensuring that those agreements apply, to the extent possible, as from the end of the transition period;

(d) the requirements of the Good Friday or Belfast Agreement of 10 April 1998 between the Government of the United Kingdom and the Government of Ireland and the other participants in the multi-party negotiations, which is annexed to the British-Irish Agreement of the same date.

(4) An appropriate authority exercising any function to which this Part applies must comply with the Human Rights Act 1998.’

This new clause is intended to replace Clauses 42, 43 and 45 of the Bill, to require Ministers to respect the rule of law and uphold the independence of the courts and the practice of judicial review, and to require UK Ministers to implement the Withdrawal Agreement.

New clause 2—Internal market common framework

‘(1) The Secretary of State must seek to reach agreement with the Scottish Government, the Welsh Government and the Northern Ireland Executive on a common framework on the United Kingdom internal market.

(2) A common framework under subsection (1) may cover—

(a) the functioning of the United Kingdom internal market;

(b) the effectiveness of market access principles; and

(c) drawing up a shared prosperity fund to balance economic development across the whole of the United Kingdom.

(3) The Secretary of State must take into account the common framework on the United Kingdom internal market in exercising any powers under Part 6 (Financial assistance powers) of this Act.’

This new clause would put the Common Framework process on a statutory footing.

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

‘(1) Within three months of the date on which this Act is passed, the Secretary of State must lay a report before each House of Parliament on the dates on which each section—

(a) was commenced; or

(b) is planned to commence.

(2) The Secretary of State must arrange for a review to be carried out within three months of the date on which this Act is passed, and thereafter at least once in each calendar year on the operation of this Act.

(3) The Secretary of State must invite the Scottish Government, the Welsh Government and the Northern Ireland Executive to contribute to the reviews in subsection (1).

(4) The reviews under subsection (1) must make an assessment of—

(a) the functioning of the United Kingdom internal market;

(b) the effectiveness of market access principles;

(c) progress towards agreeing common frameworks with the devolved administrations;

(d) progress towards drawing up a shared prosperity fund framework; and

(e) progress in resolving issues through the Joint Committee machinery in the Withdrawal Agreement.

(5) The Prime Minister must arrange for a report of any review under this section to be laid before each House of Parliament as soon as practicable after its completion.’

This new clause would ensure Ministers have a duty to report back to Parliament on the progress of the functioning of the internal market; market access; progress towards agreeing common frameworks; progress towards drawing up a shared prosperity fund; and progress in resolving issues through the Joint Committee machinery in the Withdrawal Agreement.

New clause 6—Economic development: climate and nature emergency impact statement

‘(1) Any financial assistance provided under Part 6 of this Act for the purpose of economic development must take into account the overarching need for a sustainable strategy aimed at long- term national well-being.

(2) Every proposal for financial assistance under this Act must be accompanied by a climate and nature emergency impact statement.

(3) Responsibility for the production of the climate and nature emergency impact statement required in subsection (2) resides with the applicant for financial assistance.

(4) Responsiblity for assessment of the climate and nature emergency impact statement required in subsection (2) resides with Ministers, who are required to publish this assessment for any successful proposal.

(5) The climate and nature emergency impact statement produced should take account of any carbon budget, climate, nature and environmental goals approved by the relevant Parliament.

(6) In subsection (5), the “relevant Parliament” means—

(a) where the proposed financial assistance relates to a person in England, the House of Commons and the House of Lords;

(b) where the proposed financial assistance relates to a person in Scotland, the Scottish Parliament;

(c) where the proposed financial assistance relates to a person in Wales, Senedd Cymru;

(d) where the proposed financial assistance relates to a person in Northern Ireland, the Northern Ireland Assembly.’

The intention of this new clause is to ensure that those seeking financial assistance for economic development, etc under this Act are obliged to undertake a climate and nature emergency impact statement to ensure public money is only granted to development consistent with climate, nature and environmental goals and targets.

New clause 7—Northern Ireland’s place in the UK internal market

‘(1) As part of its obligation under Article 6.2 of the Protocol on Ireland/Northern Ireland to use its best endeavours to facilitate trade between Northern Ireland and other parts of the UK, the UK Government must—

(a) publish an assessment at least every 12 months of any impact on businesses and consumers arising from the Protocol on trade between Great Britain and Northern Ireland and vice versa; and

(b) develop mitigations to safeguard the place of Northern Ireland businesses and consumers in the UK internal market.

(2) The assessment published under paragraph (1)(a) must include assessment of the impact of any actual or proposed regulatory or trade policy divergence on Northern Ireland’s place in the UK Internal Market.

(3) Any official or administrative costs arising from the duties under subsections (1) and (2) may not be recouped from the private sector.’

New clause 8—Interpretation of the Northern Ireland Protocol in accordance with International Law

‘(1) In the event that the European Union fails to act in accordance with the principles of public international law in its implementation of the Northern Ireland Protocol, by

(a) failing to undertake acts that are required by the provisions of the Northern Ireland Protocol;

(b) committing acts that are not in accordance with the provisions of the Northern Ireland Protocol;

(c) failing to undertake acts that are necessary for the effective implementation of the Northern Ireland Protocol;

(d) asserting positions in the Joint Committee that are not in accord with the provisions of the Northern Ireland Protocol; or

(e) refusing to discuss in the Joint Committee proposals on implementation of the Northern Ireland Protocol tabled by the United Kingdom;

(2) For the purposes of subsection (1), the principles of public international law that may be invoked include—

(a) the provisions of the Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations 1986, including, in particular,

(i) the need to act in “good faith” and

(ii) the need to avoid results that are “manifestly absurd or unreasonable”;

(b) established international practices, having the status of customary international law; and

(c) the commitments made in the preambular paragraphs of the Northern Ireland Protocol.

(4) A unilateral interpretative declaration issued under subsection (1) may not be submitted unless—

(a) a Minister of the Crown has laid before each House of Parliament

(i) a copy of the proposed declaration,

(ii) a statement on the nature of the dispute with the European Union,

(iii) a statement of the intended effect of the proposed declaration; and

(b) the declaration has been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown; and

(c) a motion for the House of Lords to take note of the declaration has been tabled in the House of Lords by a Minister of the Crown and—

(i) the House of Lords has debated the motion, or

(ii) the House of Lords has not concluded a debate on the motion before the end of the period of five Lords sitting days beginning with the first Lords sitting day after the day on which the House of Commons passes the resolution mentioned in paragraph (b).

(5) When a response to the submission of any unilateral interpretative declaration is received from the European Union, a Minister of the Crown shall lay before each House of Parliament the response received from the European Union, and—

(a) in the case of the approval of the declaration by the European Union, the Minister shall issue a written statement confirming that the declaration has obtained the status of an authentic interpretation of the Northern Ireland Protocol;

(b) in the case of opposition to the declaration by the European Union, the Minister shall issue a written statement, assessing any alternative interpretation formulated by the European Union and indicating the government’s intended response; or

(c) in the case of the recharacterisation of the declaration by which the European Union purports to treat the declaration as an illegal reservation, the Minister shall issue a written statement of what action it intends to take to resolve the dispute.

(6) In this section—

“approval”, “opposition” or “recharacterization” of a declaration shall have the meaning given in Guideline 2.9 of the Guide to Practice on Reservations to Treaties, contained in the report of the International Law Commission on its Sixty-Third Session in 2011;

“Joint Committee” means the Joint Committee established under Article 164 of the EU Withdrawal Agreement;

“Lords sitting day” means a day on which the House of Lords is sitting (and a day is only a day on which the House of Lords is sitting if the House begins to sit on that day);

“submit” means to make a submission to the depositary of the EU Withdrawal Agreement, as specified in Article 183 of the EU Withdrawal Agreement; and

“unilateral interpretative declaration” means an interpretative declaration as defined by Guideline 1.2 of the Guide to Practice on Reservations to Treaties, contained in the report of the International Law Commission on its Sixty-Third Session in 2011.’

Government amendments 31 and 32, 19, 33 to 38, 20 to 26, and 1 to 11.

Amendment 16, page 37, line 10, leave out Clause 45.

Government amendments 12, 13, 15 and 14.

Amendment 18, page 38, line 36, leave out Clause 46.

Amendment 29, page 39, line 27, leave out Clause 47.

Government new schedule 1—Constitution etc of Office for the Internal Market panel and task groups.

Amendment 17, in schedule 1, page 48, line 14, at end insert—

‘(8A) In the case that there is one REACH authorisation process for Great Britain, an authorisation that is lawful for the Northern Ireland market will be valid for the Great Britain market.’

The intention of this amendment is to apply the non-discrimination principle to the REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regime.

Government amendments 27 and 28.

Amendment 30, in title, line 7, leave out from “aid” to “to” in line 10.

Amendments 18 and 29 would remove both clauses in Part 6 (Financial assistance powers). This consequential Amendment removes from the long Title “to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges”.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

It is a pleasure to serve under your chairmanship, Mr Deputy Speaker. I want to begin by thanking all Members for their engagement throughout the passage of the Bill and the Public Bill Office for its excellent work in supporting Members and officials.

Before I turn to the specific amendments that we are debating, I want to briefly remind Members why it is crucial that we pass this Bill. Around 60% of Scottish and Welsh exports are to the rest of the UK, which is around three times as much as exports to the rest of the EU. About 50% of Northern Ireland’s sales are to Great Britain. In some local authorities in Wales, over a quarter of workers commute across the border. When we leave the transition period at the end of this year, laws made in Europe can be made in the UK.

Pete Wishart Portrait Pete Wishart (Perth and North Perthshire) (SNP)
- Hansard - - - Excerpts

The Minister will have noticed yesterday that the Scottish Government declared their intention not to give this Bill a legislative consent motion. Does he intend to ignore that or dismiss it, and does he hold Scottish democracy in contempt?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I very much do not hold the devolution settlement in contempt. It is right that we work together. I believe that the UK is stronger together. It is important that we give Scottish businesses—just as much as Welsh, Northern Irish and English businesses—the certainty that they want to be able to trade, so we will continue to engage with the Scottish Parliament and officials and politicians up there to achieve legislative consent.

Hundreds of powers will flow from the EU to the devolved nations and the UK Government in an unprecedented transfer. As we recover from covid, we must ensure that our economy is stronger than ever. That is why the Government have introduced this Bill and why it is essential that we pass it. We want to guarantee the continued functioning of our internal market, to ensure that trade remains unhindered in the UK.

I will begin by speaking to the amendments tabled by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, starting with those that strengthen the Bill’s measures relating to the governance and functioning of the Office for the Internal Market. The office will sit within the Competition and Markets Authority to monitor and report on the internal market on an equal basis for all Administrations. The Competition and Markets Authority has a strong reputation for independence and impartiality. The Government have strived to preserve that reputation in setting out the functions to be carried out by the Office for the Internal Market. By providing non-binding, expert reporting and technical monitoring on regulations and proposals, it will provide robust evidence on the actual or potential impact of regulatory measures.

New clause 4 gives the Competition and Markets Authority the objective of supporting the effective operation of the UK internal market through the provision of economic and technical advice and expertise. That will exist in parallel to the existing objective of the Competition and Markets Authority to promote competition for the benefit of consumers.

New clause 5 enables Competition and Markets Authority functions under part 4 of the Bill to be carried out by an Office for the Internal Market task group and introduces a new schedule setting out the Government’s arrangements for the Office for the Internal Market panel and task groups. That mirrors the existing arrangements for the establishment of panels and groups that it has in place.

New schedule 1 establishes a panel of experts to lead the work of the Office for the Internal Market. The Secretary of State will appoint a chair and further members, following consultation with Ministers from all three devolved Administrations.

William Cash Portrait Sir William Cash (Stone) (Con)
- Hansard - - - Excerpts

Will the Minister confirm that the arrangements under the Bill regarding the CMA guarantee that we will not have any jurisdiction by the European Union or the European Court over the CMA and, furthermore, that one of the cardinal principles on which the European Union and the Commission are taking their stand is that they insist that we should not benefit competitively from leaving the European Union and we should not be able to compete with them on reasonable terms?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I am grateful for that typically wise intervention. I am happy to provide that confirmation.

Amendment 1 provides absolute privilege against defamation for the Competition and Markets Authority when carrying out its functions under part 4. That will ensure that it can report and provide advice independently without needing to expend resources on preparing to defend litigation, and that businesses with deep pockets cannot sue or threaten to sue the CMA to obstruct it from carrying out its functions.

I shall set out briefly for the House the amendments that will improve the Bill’s drafting. Through amendments 31 to 34, we are taking the opportunity to put it beyond any possible doubt that alcohol minimum unit pricing-type regulation and any other sales requirements are not in the scope of the mutual recognition principle, unless they amount in practice to a total ban on a good being sold. That came up in Committee. We want to make sure that rather than politicking, we can return to a business continuity approach.

Drew Hendry Portrait Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
- Hansard - - - Excerpts

The Minister just told us about an amendment to take into account concerns about the minimum unit pricing aspect, but UK Government Ministers have been telling us for weeks that the Bill does not affect that. Clearly, that was a concern until now and we were right. Is it not also true that the non-discriminatory aspects of the amendment make it completely useless anyway?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank the hon. Gentleman for his intervention, but the answer is no. To ensure we take that political football totally off the table and return the Bill to what is was always designed to be about—giving businesses in Scotland and all parts of the UK the business continuity and certainty they need without such distractions—the technical amendment dots the i’s and crosses the t’s.

Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
- Hansard - - - Excerpts

For Northern Ireland to be a successful part of the United Kingdom, may I gently suggest that the Minister should work with us on new clause 7, which my party has tabled? It is an imperative tool to ensure that Northern Ireland is not left behind in Brexit in terms of being an integrated member of the United Kingdom of Great Britain and Northern Ireland—in other words, that we are treated equally.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will turn to new clause 7 in a second, but clearly we will treat Northern Ireland equally.

Amendments 2 to 11, 24, 27, 28 and 35 to 38 are technical changes to remove sources of potential confusion in the drafting. Amendments 19 and 21 provide fuller clarification that a wide range of agricultural processes are considered to be in scope when we refer to the production of goods. Amendment 20 ensures that the UK Government and devolved Administrations can continue to respond to specific biosecurity threats arising from the movement of animals and high-risk plants and that they are excluded from the mutual recognition and non-discrimination principles of the Bill.

Amendments 22 and 23 clarify the meaning of clause 16 that a change to the conditions attached to an authorisation requirement would bring it in scope of part 2 of the Bill. Amendment 26 ensures that the exemption in clause 23 covers the replication of non-statutory rules as well as a re-enactment of legislation. Amendments 12 to 15 ensure that the higher courts in England and Wales, Scotland and Northern Ireland may make declarations of incompatibility in respect of the regulations under clauses 42 and 43, but may not quash them. That will ensure that, in the unlikely event of a violation of convention rights, there is a remedy available through the courts.

Joanna Cherry Portrait Joanna Cherry (Edinburgh South West) (SNP)
- Hansard - - - Excerpts

Notwithstanding the terms of amendments 12 and 13, can the Minister tell us whether the Secretary of State continues to be confident that the statement he has made in terms of section 19(1)(a) of the Human Rights Act 1998 is accurate?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

We have been quite clear in the approach that we have taken in terms of the human rights impact, so I am confident that the Secretary of State has talked about that.

Robert Neill Portrait Sir Robert Neill (Bromley and Chislehurst) (Con)
- Hansard - - - Excerpts

May I press the Minister a little further in relation to amendment 13 and so on? I accept “preserving a remedy”, but it is a remedy by way of a declaration of incompatibility, as opposed to removing any offensive regulation in domestic law. It is a much harder burden or obstacle for a litigant—for every person—to go through to get a declaration of incompatibility. What is the compelling reason for adopting this unusual approach?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

This achieves the right balance in terms of a remedy, in the unlikely event of a breach of convention rights, for the reason that I have covered in terms of our impact assessment on human rights. I hope that right hon. and hon. Members will feel able to support these important but mainly technical amendments.

I will move on to the Opposition amendments, because it is important that we give them due care and attention, but I first want to remind hon. Members of the core purpose of the Bill. The Bill puts into law a market access commitment by enshrining the principles of mutual recognition and non-discrimination in the law. That means that goods and services from one part of the UK will be recognised across the country, and it will ensure that there is equal opportunity for all UK-based companies trading in the UK.

New clause 2 would place an obligation on UK Ministers to seek to agree a framework covering the UK internal market, which would need to be taken into account in the exercise of financial assistance payments. The new clause would fundamentally alter the basis on which common frameworks are developed and would not be in line with the design of common frameworks that was agreed by the UK Government and devolved Administrations. The principles agreed made it clear that the common frameworks are based on consensus rather than legislation, as we discussed in Committee. The principles also set out that the common frameworks are limited in their scoped powers returning from the EU, which have a devolved intercept.

An overarching framework would not materially contribute to effective joint working between the United Kingdom Government and devolved Administrations. Through the common frameworks programme, we are agreeing mechanisms for effective intergovernmental working. Those will cover many areas engaged by provisions in the Bill for the internal market.

We are also developing proposals for an enhanced intergovernmental system, which will support work to maintain policy coherence across the United Kingdom. This collaborative model is likely to be more effective and provide greater clarity than the process set out in the new clause, which does not clearly define when the duty in subsection (1) and the due regard duty in subsection (3) would be met.

Common frameworks are designed to allow for collaborative and flexible working between the United Kingdom Government and the devolved Administrations. Creating a framework such as this, which is underpinned by obligations in law, could undermine that effective joint work.

New clause 3 seeks to require the Secretary of State to provide Parliament with regular reviews on the functioning of the internal market, the effectiveness of provisions in the United Kingdom Internal Market Act and progress towards delivering provisions not in the Act, such as common frameworks. While I commend the intention behind the amendment, the review provisions it seeks to deliver are already provided for. They exist either in the Bill, through the Office for the Internal Market, or in previous legislation.

As part 4 of the Bill sets out, the Office for the Internal Market will have a number of reporting and monitoring responsibilities. Clause 29 sets out how the office will need to compile yearly “health of the market” reports on the functioning of the internal market, and five-yearly system reviews on the operation of parts 1 to 3. Those reports will be laid before the UK Parliament and the devolved legislatures for consideration, ensuring parliamentary transparency and accountability. I consider, therefore, that the new clause risks being highly duplicative.

It is essential that both those reports are compiled at arm’s length from both the UK Government and the devolved Administrations. That will enable the office to deliver a credible, impartial and expert analysis that delivers difficult messages to the Administrations, if necessary. However, when conducting those reports, the Office for the Internal Market will be able to consider the views of all relevant interested parties, including the devolved Administrations, in order to present evidence on how well the internal market itself and the Government’s proposals are serving stakeholders across the UK. Moreover, regarding the specific areas listed in the amendment, the Government already publish quarterly reports entitled, “The European Union (Withdrawal) Act and Common Frameworks”, which set out joint progress on common frameworks.

Stephen Doughty Portrait Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
- Hansard - - - Excerpts

The Minister is putting a brave face on things, as always. It is all very well talking about reviews and reports, but does he accept that, for an internal market to function, there actually needs to be communication between the Prime Minister and the leaders of the devolved Administrations? Why has the Prime Minister failed to communicate regularly with the First Minister of Wales, instead speaking to him only once every few months? Especially at a time of national crisis, why has the Prime Minister been so poor in his communication?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

The Prime Minister, the Secretary of State and Ministers work with all the devolved Administrations. My colleague in the Business Department has meetings—especially at this particular time—with businesses across the devolved Administrations, including in Wales.

As I say, for this particular area, we already publish the report I referred to. However, we consider it right that any reporting on the Joint Committee machinery or the UK shared prosperity fund should be undertaken separately from that on internal market provisions. For that reason, I am not able to accept the amendment.

John Redwood Portrait John Redwood (Wokingham) (Con)
- Hansard - - - Excerpts

Will the Minister confirm that Brexit is a huge opportunity to increase the powers both of this House—over our own internal market and economic prosperity—and of the devolved Administrations, which will gain power? Should everybody not cheer up and welcome the fact that both the devolved Administrations and the Union Parliament can take back control?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank my right hon. Friend for the opportunity to absolutely agree with him that this gives us a great opportunity to come together as the United Kingdom, to give that sense of certainty to businesses and, just as importantly, to grab hold of the opportunities provided by leaving the European Union.

Before I address the amendments to the Bill’s Northern Ireland protocol measures, I remind hon. Members of the points made by the Minister of State, Northern Ireland Office, my hon. Friend the Member for Worcester (Mr Walker), in Committee last week. He made it clear that

“the Northern Ireland protocol…is designed to recognise and protect the needs and unique circumstances of Northern Ireland. Central to that is ensuring that the Belfast/Good Friday agreement, its successor agreements, and the gains of the peace process are protected.”

He stressed that it was crucial to

“ensure that the delicate balance between all communities in Northern Ireland is maintained and that the UK Government pursue policies for sustained growth and stability in Northern Ireland…Through this Bill, we are acting to uphold those priorities and deliver the commitments we made in our election manifesto that we would provide unfettered access between Northern Ireland and Great Britain and ‘maintain and strengthen the integrity and smooth operation of the internal market’.”—[Official Report, 21 September 2020; Vol. 680, c. 647.]

I will now speak to new clause 1, which seeks to replace clauses 42, 43 and 45, as well as amendment 16, which intends to remove clause 45. The Government have already been clear that these clauses are required to provide a safety net of powers in reserve, which Ministers may need to use to guarantee the integrity of our United Kingdom and to ensure that we are always able to deliver on our commitments to the people of Northern Ireland, in line with the three-strand approach of the Belfast agreement.

Stephen Farry Portrait Stephen Farry (North Down) (Alliance)
- Hansard - - - Excerpts

The Minister talks about giving a safety net to the people of Northern Ireland. Does he recognise that the majority of people in Northern Ireland regard the Bill as taking away their safety net by undermining the Good Friday agreement? That is the view in Northern Ireland, and it is important that the Government listen to it, not act contrary to it.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I have spoken to businesses in Northern Ireland, and a number of them are very supportive of this. I suggest that anybody in Northern Ireland or elsewhere in the UK who believes that the Bill actually takes away from the Belfast agreement is listening to the wilful misrepresentation of the Bill by certain people politicking. Actually, the Belfast agreement has a three-strand approach, and the Bill will be a safety net only in the event that we cannot reach agreement with the EU through the Joint Committee.

None Portrait Several hon. Members rose—
- Hansard -

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will make progress, because these are important points. New clause 1 and amendment 18 would remove that safety net, which we just cannot agree with. These clauses were supported by clear majorities of the whole House at Committee stage.

I can reassure hon. Members that many of the proposals in new clause 1 are already addressed in the Bill. First, the Government have been clear that regulations made under clauses 42 or 43 would be subject to judicial review on general public law grounds, while ensuring that any claims must be brought within three months. This ensures any challenge to the regulations will be subject to timely resolution before the courts. This is essential to ensure that Northern Ireland businesses and investors in Northern Ireland have the certainty that they need. Amendments to this effect have already been agreed to in Committee, and I thank my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), who helped make that happen.

Secondly, on article 16 of the protocol, which new clause 1 mentions, in the event that regulations were made under clauses 42 or 43, we have been clear that we would activate appropriate dispute settlement mechanisms to find a solution in parallel to domestic legislation. Thirdly, the UK Government will continue, as we have always done, to negotiate with our friends and partners in the EU in good faith.

For the avoidance of any doubt, let me confirm again that we are of course committed to implementing the withdrawal agreement and the Northern Ireland protocol, and have already taken many practical steps to do this. However, as a responsible Government, we cannot allow the gains of the peace process or the economic integrity of the UK’s internal market—

John Redwood Portrait John Redwood
- Hansard - - - Excerpts

Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will happily give way.

John Redwood Portrait John Redwood
- Hansard - - - Excerpts

Would the Minister confirm that the Government are not intending to break the law—and I do not think anything they have suggested is breaking the law—and will he confirm that those who say otherwise are deliberately undermining our negotiations with the EU?

--- Later in debate ---
Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank my right hon. Friend for that. Indeed, our intention, as I say, is to work on implementing the withdrawal agreement and the Northern Ireland protocol. I have talked about the fact that we have taken many practical steps to do this. We continue to negotiate in good faith.

None Portrait Several hon. Members rose—
- Hansard -

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I am going to make progress because I still have a number of amendments to cover.

We cannot accept any amendments that will undermine provisions in the Bill by rendering them no kind of safety net at all. New clause 1 does that, I am afraid.

I now turn to new clause 8. I appreciate entirely the spirit in which this has been put forward. While all of us hoped that the EU would negotiate and discharge its obligations under the withdrawal agreement and protocol in good faith, this amendment seeks to frame in statute a number of steps that Ministers could take under international law were that not to happen. However, this amendment is not necessary, as it would already be open to Ministers to take the steps my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) proposes.

As I have mentioned, the Government have been working with the European Union to reach agreement through the Joint Committee process, and through this Bill we are preparing for a scenario where that does not happen. On 17 September, the Government issued a statement setting out the circumstances in which we would use the powers provided for under clauses 42 and 43: the Government would

“ask Parliament to support the use of the provisions in Clauses 42, 43 and 45 of the UKIM Bill, and any similar subsequent provisions, only in the case of, in our view, the EU being engaged in a material breach of its duties of good faith or other obligations, and thereby undermining the fundamental purpose of the Northern Ireland Protocol.”

Shailesh Vara Portrait Mr Shailesh Vara (North West Cambridgeshire) (Con)
- Hansard - - - Excerpts

Does the Minister agree that those who object to the clauses he has just mentioned should bear in mind the language that has been used by the EU in recent weeks in terms of what it interprets the Northern Ireland protocol to mean? It has denied the existence, as it is written on the face of the Northern Ireland protocol, of matters such as the internal market, unfettered trade and so on. So these provisions are necessary as a safety net—nothing more than a safety net. I say to the critics, “Just look at the language of the EU” and if they look at the language of the EU, they will see that these measures are perfectly reasonable.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I am grateful for that, and my hon. Friend is absolutely right. These are reasonable steps to act as a safety net.

In the statement I referred to, the Government also make it clear that

“in parallel with the use of these provisions it would always activate appropriate formal dispute settlement mechanisms with the aim of finding a solution through this route.”

None Portrait Several hon. Members rose—
- Hansard -

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I have a lot to go through, and I know a number of speakers—

Edward Leigh Portrait Sir Edward Leigh (Gainsborough) (Con)
- Hansard - - - Excerpts

Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will happily give way to the mover of that amendment. [Interruption.]

Edward Leigh Portrait Sir Edward Leigh
- Hansard - - - Excerpts

Actually, to be fair, the Minister has just been dealing with new clause 8, which I have moved. I am very grateful for what he has said. He seemed to suggest that the new clause was not in itself wrong, but was not necessary. But will he accept that, certainly when this Bill goes to the House of Lords, it might be helpful for the Government to produce an idea like this as another arrow in the armoury to reassure those who want to use international law in the right way, if the EU acts unreasonably? The advantage of a unilateral interpretive declaration under the Vienna convention, is that we can do it in this way, so I am grateful to the Minister.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank my right hon. Friend. It is right that he gets to speak as it is about his amendment. He is trying to be helpful in this regard, and I know that Ministers in the other place will take heed of his comments as they engage with colleagues there.

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Gavin Robinson Portrait Gavin Robinson (Belfast East) (DUP)
- Hansard - - - Excerpts

Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Yes. [Interruption.]

Gavin Robinson Portrait Gavin Robinson
- Hansard - - - Excerpts

I am grateful to the Minister for allowing me to come in at this point. There is no need to consider what steps would be taken in that scenario, given this new clause. It is open to the Government to accept the new clause and thus give clarity and comfort to businesses in Northern Ireland who do not know, but suspect, that there may be divergence, difference and associated costs. Nothing that he has said thus far would be injurious to his position or frustrate his hon. Friends in supporting the new clause this evening.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I heard cries from the Opposition Benches, but I think it is fair that I give way to Members who have tabled amendments.

We will obviously consider how we reduce the burden further, but we do not think it necessary at this stage to make such reporting a statutory requirement or, notwithstanding what the hon. Gentleman said, to frame it in the very broad terms set out in the new clause.

Amendment 17 deals within the mutual recognition of authorisations granted under the EU’s REACH—registration, evaluation, authorisation and restriction of chemicals—regulation. It would automatically allow substances authorised to be placed on the market in Northern Ireland under REACH to be placed on the market in Great Britain. The acceptance of mutual recognition that we have introduced for chemicals in schedule 1 is there to allow the relevant authorities to respond to local factors. Authorisations granted by the EU after the end of the transition period will not take into consideration local conditions such as lower river flows or exposure levels where those chemicals are used in Great Britain. I would like to emphasise that authorisations relate to the use of substances of very high concern, such as chemicals that can cause cancer. It is important that the Government and devolved Administrations can take local factors into account in order to prevent avoidable harm to human health or the environment from the significant risks posed by such chemicals.

Gavin Robinson Portrait Gavin Robinson
- Hansard - - - Excerpts

That response is in precisely the same terms as the one we received last week in Committee, but we are not touching on, or interested in, what the local considerations may be. The fact is that this Bill, even though we are talking about non-discrimination and the implications that there could be for business, envisages businesses having to adhere to and satisfy two separate regulatory regimes. We cannot square the circle between discrimination and non-discrimination in two separate and distinct legal regimes, whether there are local factors or not; we should have to adhere to only one. From a business perspective and an animal welfare perspective, it would be useful to have clarity. We can have one or the other, but definitely not both.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I understand the hon. Gentleman’s concerns, and obviously we are moving towards that one regime, when we can, but we are also already committed to working on a common framework for chemicals and pesticides policy. That common framework is being co-created by the Government and the devolved Administrations, and will allow us to co-ordinate policy making on matters such as REACH authorisations. Through this framework, the UK Government and the devolved Administrations will be required to set out the strategic direction for the UK regulatory regime, ensuring that existing environmental, human health and workplace standards are maintained, or exceeded where possible.

Finally, I want to discuss the amendments that address the power to provide financial assistance. By creating a new power for the Government to provide financial assistance in the areas of infrastructure, economic development, culture and sports, and education and training activities, the Government will deliver on the commitments upon which they were elected: levelling up, delivering prosperity for all our citizens and strengthening the ties that bind our Union together.

Wera Hobhouse Portrait Wera Hobhouse (Bath) (LD)
- Hansard - - - Excerpts

The Minister did not seem to mention amendment 16 when he went over that area. The amendment would remove clause 45, because legal experts fear that if the clause stands as it is, it will set up the Government against the courts. Will he explain why he thinks that is not the case?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I think I have covered why those clauses should remain, although I did not specifically talk about the amendment.

I want to turn to amendments 18, 29 and 13, which together seek to remove the power to provide financial assistance. The Government are determined to deliver on those commitments, as I was saying. It is important that we strengthen the ties that bind our Union together, that we level up and that we deliver prosperity for all our citizens.

Pete Wishart Portrait Pete Wishart
- Hansard - - - Excerpts

Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will not give way at the moment.

Part 6 of the Bill, which includes clauses 46 and 47, helps us to achieve that. This part of the Bill confers a power to ensure that the UK Government can invest UK taxpayers’ money nationwide on UK priorities. In terms of immediate relevance, it would allow the Government to support people and businesses across the country to recover from covid-19. The Government have a responsibility to people, businesses and communities across the whole of the UK.

Pete Wishart Portrait Pete Wishart
- Hansard - - - Excerpts

Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I want to make some progress.

This part of the Bill will allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales without taking away responsibilities from the devolved Administrations. New clause 6 will require by law all financial assistance given under part 6 to take into account the applicable climate, nature and environmental goals and targets. It will require that any financial assistance be accompanied by the Minister’s assessment of the project’s climate and nature emergency impact statement.

The Government are committed to ambitious climate targets, and next year we will lead the world in discussions at COP26. It is also crucial that the UK meets its domestic obligations under the Climate Change Act 2008 and its international obligations under the Paris agreement. The Climate Change Act requires Governments to set five-year carbon budgets towards meeting our target of net zero greenhouse gas emissions by 2050, covering the whole of the UK.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Not for the moment.

Any net emissions increase from a particular policy or project is therefore managed within the Government’s overall strategy for meeting carbon budgets and the net zero target for 2050, as part of an economy-wide transition. Moreover, through the Environment Bill that was introduced into this House in January, the UK Government will have a power to set long-term, legally binding environmental targets across the breadth of the natural environment.

Caroline Lucas Portrait Caroline Lucas (Brighton, Pavilion) (Green)
- Hansard - - - Excerpts

That whole section of the Minister’s speech was a perfect example of why he should not be objecting to this amendment. It is a helpful amendment that would simply ensure that the financial contributions would actually support all those lovely climate and nature objectives he has just talked about. EU structural funds have a requirement to align with sustainability. His Government keep telling us how Brexit gives us the opportunity to go further than EU environmental policy, so in that case, why does he not accept the amendment? Why is he flunking his first test?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I have had non-viability and flunking today—I am doing well! I will come to this in a moment. We are framing this in a number of pieces of legislation. I have talked about the Environment Bill, which was introduced in January. It will require the Government to set at least one target for each of four priority areas: air quality, biodiversity, water and waste reduction, and resource efficiency. It will also protect the environment from future damage by—

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

The hon. Gentleman keeps wanting to intervene. At least he has had the decency to put his name down on the speakers list this time, so maybe he will have a chance to make his points when he speaks later.

The Environment Bill will protect the environment from future damage by embedding environmental principles at the heart of policy development across Government, with clear and pragmatic guidance on their implementation. The environmental principles will be used by Ministers and policy makers to ensure that policy and legal frameworks help minimise the ill effects of human activity on the environment. Given the Government’s strong commitment already to meeting their ambitious climate targets, and the frameworks established under the Climate Change Act and proposed under the Environment Bill, I do not think that it is necessary to put such a legislative requirement in this Bill.

Alan Brown Portrait Alan Brown
- Hansard - - - Excerpts

Will the Minister give way?

--- Later in debate ---
Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I know that a number of people want to speak. I hope that I have set out the rationale for the Government’s amendments to the Bill, and that hon. Members will support them. I trust that I have addressed in sufficient detail the Government’s objections to the amendments put forward by other hon. Members, and that they will therefore feel able to withdraw them. I look forward to engaging in the debate on this crucial Bill.

Lucy Powell Portrait Lucy Powell (Manchester Central) (Lab/Co-op)
- Hansard - - - Excerpts

I rise to speak to the new clauses in my name and those of my hon. and right hon. Friends.

Here we are again—day five in the new House of Commons series, “The Internal Market Bill Debates”. While the coronavirus crisis rages on, here we are again, watching Ministers justify a Bill that breaches an international agreement signed only months ago and that threatens to break up our United Kingdom. It is a shame that we will not hear from the Prime Minister again today on Third Reading, as my right hon. Friend the Member for Doncaster North (Edward Miliband) was hoping for a sequel. He will have to make do with the Prime Minister’s understudy, the Business Secretary—what fun.

If Government Members have not been tuning in to the previous episodes, let me repeat our position on this Bill. We support a strong, successful internal market that underpins a vibrant, prosperous Union, with the UK Parliament as the ultimate arbiter of that market. We do not want a Brexit rerun; we want to get on to the next series—you know, the one where the Prime Minister delivers on his oven-ready deal and gets a good trade deal with the EU? That one. That is what the trailers promised us, anyway, and it is what the Prime Minister promised us, too.

--- Later in debate ---
Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank everybody who has spoken in the debate, and I once again thank all right hon. and hon. Members who have engaged with the Bill during its stages. This is likely to be my last contribution on this particular Bill—[Hon. Members: “More!”] I know, but I only have five minutes, and I want to pay tribute to my colleagues, the Minister of State, Cabinet Office, my hon. Friend the Member for Norwich North (Chloe Smith), and the Minister of State, Northern Ireland Office, my hon. Friend the Member for Worcester (Mr Walker), who have played an amazing role and worked so hard. I also pay tribute to my Bill team—Jon Robinson, Jeff Yen, Satchi Mahendran, Dom Entwistle, Henry Hutton, Phoebe Gould, Dominic Bull, James Frisby and, in my private office, Ollie Benbow-Wyke.

Those of us on the Government Benches have heard and participated in the passionate debates on the Bill during the past two weeks, and I pay tribute to all their considered contributions. My right hon. and hon. Friends have made some impassioned speeches about the need for business certainty and about why the Union is so much better together than apart.

The debates have obviously been passionate, because of the importance of the Bill, but some of the other speeches in this Chamber today, and on some of the Committee days, have been somewhat circular. We have heard that there will apparently not be a US trade deal, but that we will get chlorinated chicken. We have heard that we love devolved spending, but that we would rather it be done from Brussels. We have heard people celebrating 62 countries having left the UK at various points in their recent history. Not one of those has the UK pound or wanted to join a bigger political union such as—oh, I don’t know—the EU, for example.

None the less, we want to make sure that we can get on with the Bill, because it is so important to continuing to provide certainty for businesses as we seek to recover from covid-19, prepare for the opportunities after the transition period and protect jobs. The Bill will ensure UK businesses can trade across our four home nations in a way that helps them invest and create jobs, just as they have for hundreds of years. We will do that in a way that supports and enables one of the largest transfers of power in the history of devolution, while maintaining that certainty for businesses. That will be done in a way that preserves our high standards, whether environmental, food or animal welfare, and in any number of other areas. It is therefore crucial that we pass this Bill, and I commend it to the House.

Nigel Evans Portrait Mr Deputy Speaker (Mr Nigel Evans)
- Hansard - - - Excerpts

Before I put the question, there are likely to be Divisions, so, please, will only Front Benchers go out through the door in front of me? All Back Benchers must leave behind me, go down to Westminster Hall and join the queue. I am going to ask the Doorkeepers and the Whips to enforce that strictly, because we have to have social distancing.

I apologise to the seven MPs who were unable to get in. If anybody wishes to withdraw from Third Reading, please come and see me during the Division.

Question put and agreed to.

New clause 4 accordingly read a Second time, and added to the Bill.

New Clause 5

Office for the Internal Market panel and task groups

“(1) The CMA may authorise an Office for the Internal Market task group constituted under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 to do anything required or authorised to be done by the CMA under this Part (and such an authorisation may include authorisation to exercise the power conferred on the CMA by this subsection).

(2) Schedule (Constitution etc of Office for the Internal Market panel and task groups) contains provision about the Office for the Internal Market panel and Office for the Internal Market task groups.” —(Paul Scully.)

This new clause enables functions of the Competition and Markets Authority under Part 4 to be carried out on the authority’s behalf by Office for the Internal Market task groups constituted under Schedule 4 to the Enterprise and Regulatory Reform Act 2013: see NS1. This new clause would be inserted after Clause 28.

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Withdrawal Agreement and Rule of Law Duty

‘(1) An appropriate authority exercising any function to which this Part (Northern Ireland Protocol) applies must—

(a) respect the rule of law;

(b) allow for the possibility of judicial review of an enactment, decision, act or omission by the appropriate authority;

(c) use the provisions of Article 16 of the Protocol to protect the interests of the United Kingdom.

(2) An appropriate authority exercising any function to which this Part applies must comply with the obligations of the United Kingdom under international law.

(3) An appropriate authority exercising any function to which this Part applies must comply with—

(a) the requirement under Article 5 (Good faith) of the Withdrawal Agreement for the EU and the United Kingdom to assist each other in full mutual respect and good faith to carry out the tasks which flow from the Agreement;

(b) the requirement under Article 167 (Consultations and communications within the Joint Committee) for the EU and the United Kingdom to endeavour to resolve any dispute regarding the interpretation and application of the provisions of the Agreement by entering into consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution;

(c) the requirement under Article 184 (Negotiations on the future relationship) of the Withdrawal Agreement for the EU and the United Kingdom to use their best endeavours, in good faith and in full respect of their respective legal orders, to take the necessary steps to negotiate expeditiously the agreements governing their future relationship referred to in the Political Declaration of 17 October 2019 and to conduct the relevant procedures for the ratification or conclusion of those agreements, with a view to ensuring that those agreements apply, to the extent possible, as from the end of the transition period;

(d) the requirements of the Good Friday or Belfast Agreement of 10 April 1998 between the Government of the United Kingdom and the Government of Ireland and the other participants in the multi-party negotiations, which is annexed to the British-Irish Agreement of the same date.

(4) An appropriate authority exercising any function to which this Part applies must comply with the Human Rights Act 1998.’ —(Lucy Powell.)

This new clause is intended to replace Clauses 42, 43 and 45 of the Bill, to require Ministers to respect the rule of law and uphold the independence of the courts and the practice of judicial review, and to require UK Ministers to implement the Withdrawal Agreement.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---
18:05

Division 113

Ayes: 256


Labour: 191
Scottish National Party: 48
Liberal Democrat: 10
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Alliance: 1
Conservative: 1
Green Party: 1

Noes: 350


Conservative: 342
Democratic Unionist Party: 8

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
00:00

Division 114

Ayes: 258


Labour: 191
Scottish National Party: 48
Liberal Democrat: 10
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Alliance: 1
Green Party: 1

Noes: 351


Conservative: 343
Democratic Unionist Party: 8

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
18:35

Division 115

Ayes: 264


Labour: 191
Scottish National Party: 48
Liberal Democrat: 10
Democratic Unionist Party: 8
Plaid Cymru: 3
Independent: 2
Alliance: 1
Conservative: 1
Green Party: 1

Noes: 342


Conservative: 341

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
18:51

Division 116

Ayes: 256


Labour: 192
Scottish National Party: 46
Liberal Democrat: 8
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Alliance: 1
Green Party: 1

Noes: 354


Conservative: 344
Democratic Unionist Party: 7

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
Alok Sharma Portrait The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
- Hansard - - - Excerpts

I beg to move, That the Bill be now read the Third time.

More than 150 right hon. and hon. Members have spoken during the passage of the Bill so far. We have had around 30 hours of often passionate debate, and I pay tribute to Members across the House for their contributions. The Public Bill Office has been unstinting in its support to all Members and officials across Government, and I am incredibly grateful for all its work. I particularly wish to thank the Minister for Small Business, Consumers and Labour Markets, my hon. Friend the Member for Sutton and Cheam (Paul Scully), the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith), and the Minister of State, Northern Ireland Office, my hon. Friend the Member for Worcester (Mr Walker) who have ably steered the Bill through Committee and Report.

The UK internal market is the bedrock of our shared economic and social prosperity as a country. Since the Acts of Union, it has been the source of unhindered and open trade, which has supported growth and safeguarded livelihoods and businesses. It demonstrates that, as a Union, our country is greater than the sum of its parts.

Since 1973, EU law has acted as the cohering force for the UK internal market. In 2016, the British people voted to leave the European Union, which the Government delivered in January, and as we leave the transition period at the end of this year, the Government will leave the European Union’s legal jurisdiction once and for all. We need to replace this law to continue the smooth functioning of our centuries-old internal market, while of course also ensuring that the devolved Administrations benefit from a power surge from Brussels.

Shailesh Vara Portrait Mr Vara
- Hansard - - - Excerpts

The fact is that there is nothing in this Bill that in any way compromises the Belfast/Good Friday agreement. Does my right hon. Friend agree that it is deeply regrettable that some people, for political purposes, seek to unnecessarily scaremonger, and that they should desist from doing so?

Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

My hon. Friend makes an important point, and I will come on to it. As I was saying, we need to replace the law to continue the smooth functioning of our centuries-old internal market, while also ensuring that devolved Administrations benefit from that power surge from Brussels. The Bill will do precisely that.

Our approach will give businesses the regulatory clarity and certainty they want. It will ensure that the cost of doing business in the UK stays as low as possible, and it will do so without damaging and costly regulatory barriers emerging between the different parts of the United Kingdom. I cannot overstate the importance of this economic continuity Bill, especially as we seek to recover from covid-19. It is ultimately designed to safeguard jobs and livelihoods, protect businesses, give choice to consumers and continue to showcase the United Kingdom as a beacon for inward investment. That is why this legislation is so vital.

My Department and I, along with colleagues across Government, have spoken to a large number of businesses and business representative organisations across the whole of the United Kingdom about our proposals to safeguard our internal market. Businesses have overwhelmingly backed our approach. The British Chambers of Commerce has stressed that

“A fragmented system would create additional costs, bureaucracy and supply chain challenges that could disrupt operations for firms across the UK.”

NFU Scotland has emphasised the importance of protecting the UK internal market, stating:

“NFU Scotland’s fundamental priority, in the clear interest of Scottish agriculture as well as the food and drinks sector it underpins, is to ensure the UK Internal Market effectively operates as it does now.”

I could go on. Make UK has noted that it is particularly important to manufacturers that they can trade simply and effectively across all parts of the United Kingdom. The business community is clear: we must continue to safeguard the sanctity of the seamless UK internal market.

The Bill also respects and upholds the devolution settlements—[Interruption.] The right hon. Member for Ross, Skye and Lochaber (Ian Blackford) says it does not. He will get a large number of powers—an unprecedented level of powers—back after the transition period. If he does not want them, he ought to stand up and say that, but the reality is that he is against this Bill because he wants to be shackled to the European Union forever. That is the reason he is against this—

Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

The right hon. Gentleman says from a sedentary position that I am talking nonsense. He just needs to re-read his Second Reading speech and he will see that it is full of inaccuracies. We have engaged in good faith with the devolved Administrations throughout the passage of the Bill. It was very unfortunate that the Scottish Government decided to walk away from the discussions on the internal market last year and, as I said, we want to continue to work constructively.



Let me turn briefly to the Northern Ireland element of this business Bill, which has attracted a disproportionate amount of interest and commentary. I and every Member on the Government Benches stood on a manifesto commitment to ensure that Northern Ireland businesses and producers enjoy unfettered access to the rest of United Kingdom, and that in the implementation of our Brexit deal we would maintain and strengthen the integrity and smooth operation of our internal market. The Bill delivers on those commitments. We have also been clear that we must protect the gains of the peace process and maintain the Belfast/Good Friday agreement.

Sammy Wilson Portrait Sammy Wilson
- Hansard - - - Excerpts

The Secretary of State is absolutely right that the Bill has no impact at all on the Good Friday agreement, and, indeed, is only helpful to the economy in Northern Ireland—but only helpful in a limited way. He talked about access to the UK internal market for Northern Ireland goods going into GB, but will he say something about the opposite direction? Northern Ireland depends so highly on imports from GB, and yet there is no mention of safeguards to stop trade being blocked in that direction.

Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

The right hon. Gentleman knows that discussions continue. He and I have had those discussions as well. But he makes the point that this is a business Bill, and I hope that every Member, like him, will support it on Third Reading.

We have taken these powers to ensure that, in the event that we do not reach an agreement with our EU friends on how to implement the protocol, we are able to deliver on promises in our manifesto and in the Command Paper. This is a legal safety net that clarifies our position on the Northern Ireland protocol, protecting our Union, businesses and jobs.

Fleur Anderson Portrait Fleur Anderson (Putney) (Lab)
- Hansard - - - Excerpts

The Irish Foreign Minister said recently that this Bill undermines the EU withdrawal legislation, has damaged trust between the Irish and UK negotiating teams, and is damaging Britain’s reputation globally. Does that give the Secretary of State any cause for concern?

Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

This has been debated over the long passage of the Bill in this House. As the hon. Lady and other Members will know, we introduced an amendment in Committee that provides a break-glass mechanism that ensures that the safety net will come into force only if a motion in this House is passed with a requirement for a take-note debate in the other place. I hope that will allow her to vote for the Bill on Third Reading.

Joanna Cherry Portrait Joanna Cherry
- Hansard - - - Excerpts

Will the Secretary of State give way?

--- Later in debate ---
Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

I will not; I am now winding up.

This Bill provides the certainty that businesses want and need to invest and create jobs. It helps to maintain high standards and choice for consumers while keeping prices down. It reaffirms our commitment to devolution, supporting one of the biggest transfers of power to the devolved Administrations. It allows the Government to invest further in communities across the United Kingdom. This is about levelling up across the whole of the UK and strengthening our precious Union, which some would want to put at risk. I am a Unionist, as is the right hon. Member for Doncaster North (Edward Miliband); neither of us are separatists. Above all, the Bill continues to preserve the UK internal market that has been an engine of growth and prosperity for centuries. In voting for this Bill, we protect our constituents’ jobs, businesses and livelihoods. I commend it to the House.

--- Later in debate ---
Ian Blackford Portrait Ian Blackford
- Hansard - - - Excerpts

My hon. Friend is correct. You know, we were told after the referendum in Scotland in 2014 that Scotland’s place would be respected and that we were to lead the United Kingdom, and here we find not just our Parliament in Edinburgh but the Administrations in Cardiff and in Northern Ireland being ignored. We can refuse to give consent, as we are doing, to this Bill, but the Government carry on regardless. Where is that respect for devolution? Where is the respect for the people of Scotland? In a referendum in 1997, 75% of the people of Scotland voted for a Parliament. It is not the SNP’s Parliament. it is not the Scottish Government’s Parliament; it is the Parliament of the people of Scotland—the Parliament of the people of Scotland when the Scotland Act 1998 was passed that gave powers over devolved matters. What those on the Government Benches refuse to see—what the rest of us can see—is that this Parliament is giving itself the power to override the Scottish Parliament in health, in education, in transport and in housing.

Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

No, it’s not.

Ian Blackford Portrait Ian Blackford
- Hansard - - - Excerpts

I can hear the Secretary of State shouting, but it is his Bill and I suggest he reads it, because clauses 46 and 47 are very clear: powers over infrastructure, including

“water, electricity, gas, telecommunications, sewerage or other services… railway facilities (including rolling stock), roads or other transport facilities… health, educational, cultural or sports facilities”.

The Secretary of State can sit and tell us that it does not override devolution. Well, the facts are in the Bill. What the Government have done is overridden devolution and, quite frankly, I can tell you, Madam Deputy Speaker, we in Scotland will be having absolutely none of it.

So tonight, just as—[Interruption.] You can chunter and shout all you like, but at the end of the day, the people in Scotland have been watching what has been going on over the past few months, with Scotland being disregarded. The fact is that we won the election in Scotland last December on the right of Scotland to choose its own future. We had no desire to be taken out of the European Union against our will. In England, you can choose to do what you want as far as Brexit is concerned, but we do not—

--- Later in debate ---
Ian Blackford Portrait Ian Blackford
- Hansard - - - Excerpts

I understand why the hon. Gentleman makes that call, but we should not be relying on the Members of the House of Lords; they are unelected. The fact is that this place has not done its job to defend the rule of law, or to protect devolution. I feel for Labour Members who were responsible, under Blair’s Government, for bringing devolution in, because everything that was established under that programme has been undermined. There is a real call to everyone in Scotland, regardless of whether they voted for the SNP in the past, to recognise the maxim that power devolved is power retained.

People in the past have said to me, “Could Westminster shut down the Scottish Parliament?” I have argued in the past that that would be fanciful. Nobody could believe that our Parliament could be attacked in such a way, but what is happening with this Bill is that our Parliament, which has had the support of the people of Scotland—

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Is getting more power.

Ian Blackford Portrait Ian Blackford
- Hansard - - - Excerpts

It is being usurped. It is not getting more power—read the Bill. Read clauses 46 and 47, and read clause 48, which takes away from Scotland the powers that we have over state aid. When I look at the Government Benches, it really is Trumpesque—twisting the truth beyond reality.

Ian Blackford Portrait Ian Blackford
- Hansard - - - Excerpts

My hon. Friend is correct. It is perhaps worth reminding the House, in this context, that we have the joint ministerial committees, which recognise their responsibility to put frameworks in place.

Ian Blackford Portrait Ian Blackford
- Hansard - - - Excerpts

I hear the hon. Lady saying that they have done, and she is quite right about that, because the Governments in Edinburgh, Cardiff and Belfast recognised the need to work together, where it was appropriate, in creating the circumstances to ensure that there was continuation of a market across these islands. The commitment that I make, and that my party and my Government make, is that we will work constructively with the Government in London to ensure that that happens, but the rug has been pulled from under that by a UK Government who have introduced this Bill, who legislate for the market that they want to create and who attack the fact that we have provisions in Scotland in areas such as the environment, food standards and building standards, which we can no longer defend.

There will be a race to the bottom in accepting the lowest standards, and there is not a single thing that we can do about it. There is not a single thing that we can do to protect our food standards once this takes place. The Secretary of State is shaking his head, but we already have differences in, for example, pasteurised milk. What will happen post this? We will not have the ability to keep the uniqueness of our regulations. What happens to support for our crofters and farmers, for example?

The responsibility falls tonight on this House to do the right thing. I obviously understand if those on the Government Benches are unwilling to take advice from me and my party, but they would do well to listen to the strength of the arguments emanating from some on their own Benches. During Committee, the former Prime Minister, the right hon. Member for Maidenhead (Mrs May), gave a powerful and insightful analysis of the dangers of this legislation. Her words are worth repeating for those left on the Conservative Benches who are not yet card-carrying members of Cummings and the Prime Minister’s ideological cabal. She concluded her remarks by warning:

“I consider that, in introducing clauses 41 to 45, the Government are acting recklessly and irresponsibly, with no thought to the long-term impact on the United Kingdom’s standing in the world. It will lead to untold damage to the United Kingdom’s reputation and puts its future at risk.”—[Official Report, 21 September 2020; Vol. 680, c. 668.]

Those are stark words from the former Prime Minister on what the Government are doing to trash the reputation of the United Kingdom. The right hon. Member for Maidenhead and I may not agree on much, but few could deny that not only were those words powerful, but they are very likely to be proven prophetic.—[Interruption.] I hear a comment, “Too long. It is not fair on everyone else.” I will tell Labour Front Benchers what is not fair. It is what has been done to Scotland tonight. I have the right, as the leader of the Scottish National party at Westminster, to make sure our voices are heard, and I tell the House that the SNP voices will be heard and will be heard without apology.

Despite the bluff and bluster we have repeatedly heard, none of us are fooled that this is some kind of benign business Bill. We know the real intent of this legislation: after 21 years of devolution, the Tories are stripping powers from our Scottish Parliament. The Tories did not support devolution and now they see the popularity of the Scottish Government and they do not like it. It is little wonder why, because that support for the Scottish Government stands in direct contrast to the unpopularity of Tory Governments from Westminster.

Earlier today, the Scottish social attitudes survey showed that public trust in the Scottish Government to act in Scotland’s best interest was at more than four times the trust shown in the UK Government. The survey, conducted in 2019-20, before lockdown, shows that people were nearly five times more likely to say that the Scottish Government should have more influence on how the country is run than that the UK Government should. Some 61% of people trusted the Scottish Government to work in Scotland’s best interest, which compares with a record low of 15% for the UK Government—and you can bet your boots that after what has happened tonight it will be a lot lower now than the 15% that was recorded.

--- Later in debate ---
20:05

Division 117

Ayes: 256


Labour: 194
Scottish National Party: 46
Liberal Democrat: 10
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Alliance: 1
Green Party: 1

Noes: 348


Conservative: 340
Democratic Unionist Party: 8

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
--- Later in debate ---
20:21

Division 118

Ayes: 340


Conservative: 340

Noes: 256


Labour: 192
Scottish National Party: 48
Liberal Democrat: 10
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Alliance: 1
Green Party: 1

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020

(3 years, 5 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 29 September 2020 - (29 Sep 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

That the Bill be now read a second time.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

My Lords, I beg to move that the Bill be now read a second time. The United Kingdom’s internal market has been the bedrock of our shared prosperity for centuries. Since the Acts of Union, the UK internal market has been the source of unhindered and open trade across the entire United Kingdom. It has enabled businesses and individuals to thrive and has been the source of unhindered and open trade across our country. It has helped to demonstrate that, as a union, our country is greater than the sum of all our parts.

Around 60% of Scottish and Welsh exports are to the rest of the UK, which is around three times as much as exports to the whole of the rest of the European Union. About 50% of Northern Ireland’s sales are to Great Britain. When we leave the transition period at the end of this year, an unprecedented number of powers will flow from the EU to the devolved nations and the UK Government. As this happens, and as we recover from Covid, we must ensure that our economy is stronger than ever. The Bill will guarantee the continued functioning of our internal market to ensure that trade remains unhindered in the UK and businesses can continue to operate with certainty. Without the Bill a Welsh lamb producer, for whom almost 60% of the market is the rest of the UK, could end up unable to sell their lamb as easily as before. Scotch whisky producers could lose access to supply from English barley farmers, unnecessarily putting at risk Scotland’s own whisky industry.

This package guarantees a continuation of our centuries-old position that there should be no economic barriers to trading within the United Kingdom. To achieve this, the Bill will do the following. First, it will introduce a market access commitment for goods, services and professional qualifications respectively. This will ensure that the UK can continue to operate as a coherent internal market and maintain the deep integration and strong economic ties that bind the UK together. Secondly, it provides a statutory underpinning for a new office for the internal market, within the Competition and Markets Authority. This office will independently monitor the health of the UK internal market and provide technical advice on issues that may impact it, reporting to the devolved legislatures and to this Parliament itself.

Thirdly, it introduces provisions to ensure that there is a safety net in domestic law to prevent new checks and controls on goods going from Northern Ireland to Great Britain, in line with the Government’s commitment to unfettered access for qualifying Northern Ireland goods. Fourthly, it enables strategic investment in all four corners of the United Kingdom, giving the UK Government a power to provide financial assistance for the purposes of economic development, culture, sporting activities and infrastructure, as well as both international and domestic educational and training activities and exchanges.

Finally, it reserves to the UK Parliament the exclusive ability to legislate for a UK subsidy control regime once this country ceases to follow EU state aid rules at the end of the transition period. This is to ensure that subsidies do not unduly distort competition within the UK’s internal market. Let there be no doubt: this Bill is crucial in providing certainty to businesses, and we must give them that certainty.

My department and I, along with colleagues across government, spoke to hundreds of businesses and business representative organisations from across the UK to gather views and feedback on our original White Paper proposals. Over 270 businesses and organisations responded to a public consultation on the proposals, and businesses overwhelmingly supported our approach. I record my thanks for the engagement we have had from all aspects of business on this.

The Bill will put in law a market access commitment by enshrining mutual recognition and non-discrimination: mutual recognition to ensure that goods and services from one part of the UK will be recognised across the country, and non-discrimination to guarantee that there is equal opportunity for companies trading in the UK regardless of where in the country that business is based. The same principles of mutual recognition and non-discrimination will also be applied to services and will introduce a process for the recognition of professional qualifications across the whole UK internal market. This will allow professionals such as doctors and nurses, qualified in one of the UK nations, to work in any other part, as I am sure Members would expect. Furthermore, the Government are inviting views on the regulatory framework for professional qualifications, to ensure that our approach remains world leading. We have, of course, listened to those in the devolved Administrations and business, and have made some exemptions, for example to respect the divergence that exists between the legal professions in England, Wales and Scotland.

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, guaranteeing a continuation of our centuries-old position that there should be no economic barriers to trading within the United Kingdom.

We consulted on how to ensure an independent monitoring and advice function to uphold the UK internal market. In response, and to oversee the functioning of the internal market, the Bill will set up an office for the internal market within the CMA. This office will monitor and report on the internal market to the UK Government, devolved Administrations, the legislatures, and external stakeholders, ensuring the continued smooth operation of that market that businesses so desperately desire.

Subsidy control has never been devolved. It is crucial to continue to have a UK-wide approach, to protect our internal market and prevent harmful and distortive practices arising. The purpose of the Bill is to ensure that we continue to have fair and open competition across the UK, and so it is right that we have a UK-wide approach to subsidy control. As we take back control of this policy from the EU, the UK will have its own domestic subsidy control regime. From 1 January, the Government will follow the World Trade Organization rules for subsidy control, and any related commitments the Government have agreed in free trade agreements.

We will consult on whether to go further than those existing commitments, including whether legislation is necessary to achieve a system that promotes a competitive and dynamic economy throughout the United Kingdom. We appreciate that our longer-term approach will have implications for business and all public authorities that grant subsidies with taxpayers’ money, including the devolved Administrations. So we will take the time to listen closely to those voices and design a system that promotes a competitive and dynamic economy throughout the whole of the United Kingdom. However, we will not return to the 1970s approach of bailing out unsustainable companies, be they in Scotland, England, Wales or Northern Ireland.

As we leave the EU and take back control of our money, we will require new powers to continue to invest across the United Kingdom. Therefore, this Bill will confer a power to make sure that the UK Government can invest UK taxpayers’ money nationwide, including on the UK Government’s priorities, supporting people and businesses across the UK and delivering on our commitment to level up all parts of our country. Currently, unelected EU bodies spend billions of pounds that we provided as a net contributor, on our behalf. They spend our money, with very little say from elected politicians in the UK. This will, rightly, change as we leave the transition period.

The UK Government intend to take a much more collaborative approach in delivering programmes that replace EU funds. This includes engaging heavily with local authorities as well as wider public and private sector organisations. And, of course, it means working closely with the devolved Administrations to make sure that investments complement their existing—and continuing—powers used to support citizens in Scotland, Wales and Northern Ireland. This power to provide financial assistance will cover infrastructure, economic development, culture and sport. It will also support educational and training activities and exchanges both within the UK and internationally, much of which of course was previously done at EU level.

These powers are not designed to take powers from the devolved Administrations, but to add powers to direct investment in a similar fashion to the EU Commission, while reforming programmes and empowering MPs from Wales, Scotland, Northern Ireland and England to design and scrutinise funds in a way that was never possible within the EU. This will also allow the UK Government to meet their commitments to replicating and matching EU structural funds within the shared prosperity fund. This is in line with the Government’s manifesto commitments to strengthen the union and level up the country. This power to provide financial assistance is one of the mechanisms by which the Government hope to achieve these ambitions.

We will also be introducing limited and reasonable steps to provide a safety net to ensure that peace can always be preserved in Northern Ireland. In the event that we do not reach an agreement with the EU on how to implement the Northern Ireland protocol, we must be able to deliver on promises in our manifesto and in the Command Paper. This is a legal safety net which clarifies our position on the Northern Ireland protocol, protecting our union and ensuring that businesses based in Northern Ireland have true “unfettered access” to the rest of the United Kingdom, without paperwork. The Bill will also provide certainty on state aid, ensuring that there is no legal confusion and that, while Northern Ireland will remain subject to the EU’s state aid regime for the duration of the protocol, Great Britain will not be subject to EU rules in this area.

This Bill, and our wider approach to protecting our internal market, is designed for co-operation between the four parts of the United Kingdom. It will protect our common causes, such as the setting of high standards in our economy, and will work in concert with the common frameworks programme and the IGR, which is due to conclude shortly. After all, the UK has some of the highest standards in the world. It is worth reminding noble Lords that we go beyond EU rules in many areas, including health and safety in the workplace, workers’ rights, food, health and animal welfare, consumer protections, household goods, net zero and the environment. We will maintain that commitment to high standards, including as we negotiate trade agreements that will provide jobs and growth in the UK. We have been driving this forward through our common frameworks programme, to drive collaboration and a coherent approach to policy across the UK now that we have left the European Union. I therefore want to reiterate the Government’s invitation to all devolved Administrations to work together on this Bill, with the common frameworks process and with the internal market as a whole.

This Bill is crucial to ensuring that we continue to work together as one United Kingdom to support jobs and livelihoods across our entire country. As we rebuild and recover from Covid-19 and look ahead to opportunities following the end of the transition period, this Bill will provide the certainty that businesses need to invest and create jobs. It will accompany one of the biggest transfers of powers in the history of devolution, with hundreds of powers flowing from the EU to the devolved Administrations at the end of the transition period. This Bill will do all this and preserve the internal market, which has been an engine of growth and prosperity since the Acts of Union. That is why we need this Bill. I beg to move.  

Amendment to the Motion

Moved by

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
2nd reading & 2nd reading (Hansard)
Tuesday 20th October 2020

(3 years, 5 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 135(a) Amendments for Committee - (20 Oct 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved on Monday 19 October by
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

That the Bill be now read a second time.

Amendment moved on Monday 19 October by
--- Later in debate ---
Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
- Hansard - - - Excerpts

My Lords, obviously, I thank all those who have spoken in this long debate and, in particular, the noble Baroness, Lady Hayman of Ullock, and my noble friend Lord Sarfraz for their remarkable and uplifting maiden speeches. Sometimes all of us need uplifting, and long may they stay in this House to enlighten us.

This has been a serious debate, as is appropriate on serious matters of serious importance—the sustaining of the union of the United Kingdom and the building of prosperity in a climate of certainty and security for business. However, I had some reflections during the course of the debate, and at one point found myself asking whether Henry VIII’s foundation of the Church of England was fully in accord with both our domestic law and international obligations.

I apologise if I cannot mention over 100 speakers by name when addressing the many issues raised, but I have listened carefully to every speech, shall respond as fully as I can on the main issues and will write to noble Lords on points of fact where that is not possible. First, I address points made on the main parts of the Bill, ably presented by my noble friend Lord Callanan, before I come directly to answer the amendments before us, on which the noble and learned Lord, Lord Judge, has indicated that—unusually—he wishes to divide the House at Second Reading.

I was pleased to hear understanding across the House for the purposes behind the Bill, even if we do not agree on it. There is agreement that commerce, services and professions must be enabled to operate freely across the whole United Kingdom. That is widely supported—indeed, demanded—by business, including in Northern Ireland. Without this legislation, there could be problematic divergence, putting at risk the seamless trade that businesses in Scotland, Northern Ireland, Wales and England enjoyed before we entered the EU, enjoyed in it and should enjoy hereafter. This Bill will protect trade and secure jobs across all parts of the United Kingdom after the end of the transition period. It will guarantee that UK businesses can trade unhindered in every part of the United Kingdom.

I assure those noble Lords who raised this that the Government will maintain the highest standards for consumers, workers, food and the environment. We have repeatedly stated our commitment to high standards. 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. We are committed to being a global leader in environmental protection and animal welfare standards while maintaining the high quality of our produce for consumers at home and overseas.

Some noble Lords, including those who spoke today, have questioned the need for the Bill, arguing that non-statutory arrangements may be enough. They fear that the Bill may restrict the freedoms of devolved Administrations. We have listened and will continue to listen to such concerns; we wish for close co-operation with the devolved Administrations—there is no so-called power grab here. Indeed, at the end of the transition period, hundreds of powers currently exercised by the EU will flow back to the UK, as the British people have asked. Many of the powers coming back from the EU fall within the competence of the devolved Administrations, which will see a major transfer of powers that before the EU exit they did not have.

As we set out in our White Paper, without an up-to-date, coherent market structure, economic barriers could block or inhibit trade in goods across the United Kingdom, and services could be significantly and detrimentally impacted. Future complexities could arise— for example, differing qualifications for plumbers or technicians could limit access to skilled construction workers and make it harder for one nation’s construction companies to bid for contracts in another. Such costs could ultimately reach consumers, increasing prices or decreasing choice. Significant and unmanaged economic barriers arising across the UK could not only cause serious harm to the interests of our business and consumers but threaten the prosperity of the UK economy as a whole.

I was pleased that so many noble Lords commended the common frameworks programme, which has been mentioned again today. It is an important process and one that will continue. We will update the House on progress as we work with our friends in the devolved Administrations in the months ahead and will study carefully the observations of your Lordships’ Select Committees on this part of the Bill. I assure the House that this Bill does not make the common frameworks redundant, as many, including the noble Baroness, Lady Finlay of Llandaff, my noble friend Lord Dunlop, the noble Baroness, Lady Crawley, the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady Andrews, fear. However, common frame- works do not replace the need for this Bill; they are a mechanism for collaborative policy-making in areas of returning EU law which intersect with devolved competence. They are sector-specific and allow for a deeper level of regulatory coherence, but they do so in a specific set of policy areas. While they remain a crucial part of our regulatory landscape, common frameworks alone cannot guarantee the integrity of the entire internal market.

The Bill ensures that areas without a common frame- work will still benefit from the regulatory underpinning and, crucially, market coherence will be provided for issues that fall around, or between, individual sector-focused frameworks. The Bill complements common frameworks by providing a broad safety net and additional protections to maintain the status quo of seamless intra-UK trade across all sectors of the economy. That will ensure maximum certainty for businesses and for investors, domestic and foreign. I am sure that all noble Lords support that objective. We look forward to pursuing these important issues in detail in Committee —and I give that undertaking.

Let me turn to the subject of most of the speeches yesterday—Part 5 of the Bill and the amendments before your Lordships. The future of our union and the sustaining of the Belfast agreement are at the heart of this Bill. A strong and open internal market with the ability to support all parts of our union and deliver prosperity for communities across the whole of the United Kingdom is something that we should surely all support. That includes Northern Ireland, as is affirmed in Clause 42 in Part 5. Support for free trade across the United Kingdom must extend to the good people and businesses of Northern Ireland; they are our countrymen and women, and part of our union. This Government will allow no foreign authority, armed with whatever pretext, high or low, to undermine the principle of free trade within our customs territory that has been fundamental since the Act of Union.

I am pleased to tell the noble Lord, Lord Browne, that EU state aid rules will not apply to Northern Ireland as they do today. State aid provisions apply only to trade subject to the protocol, which is limited in scope to goods and wholesale electricity markets. Northern Ireland will therefore enjoy new flexibilities with respect to support for its service industries, including those with potential for rapid growth—for example, fintech and cybersecurity businesses.

I thank the noble and learned Lord, Lord Judge, and I hope that the House will forgive me if I send my good wishes to Lady Judge, and wish for a speedy recovery. I thank him for meeting me; I understand why he cannot be here today, and I thank him for sharing with me his thoughts on this part of the Bill. As we have heard, his objections fall not on the objective to safeguard our union and the Belfast agreement, but on his strongly held sense, held by other noble Lords who have spoken, that Part 5 of the Bill, sent to us by another place, undermines the rule of law.

We share a full and fundamental respect for and belief in the rule of law. That is not something handed to us from outside by some directive or convention. It was won in the sacrifice of civil war and affirmed in the Glorious Revolution, the Bill of Rights and the Claim of Right, since when our parliamentary Government and rule of law, as many have said, have been an inspiration to the world.

The Government do not believe that the limited, contingent proposals in this Bill change that position. They do not accept that these safeguard provisions render our country, as has been claimed, an international pariah, or justify, as was asserted, murderous actions by others. People are still talking to us. Indeed, your Lordships’ Constitution Committee said in paragraph 171 that in

“domestic law, it is correct that Parliament may enact legislation which”

infringes

“international obligations.”

This Bill does nothing to abrogate our commitment. We are committed to implementing the withdrawal agreement and the Northern Ireland protocol, and have already taken many practical steps to do this. We continue, as the noble Lord opposite said, to work with the EU in the joint committee set up to address uncertainties and incompatibilities in parts of the Northern Ireland protocol. We hope we may resolve the outstanding issues and avoid the maximalist interpretations by the EU that might lead to a situation where tensions arise between our domestic obligations and our international commitments and we have to act to resolve them.

We cannot guarantee that agreement will be found. The fact remains that we have not reached agreement. Last Thursday the EU summit appeared explicitly to rule out a Canada-style deal. It effectively restated its opening position in the negotiation as its present position, and instructed the UK to move. As my right honourable friend the Prime Minister said last Thursday, the EU has

“refused to negotiate seriously for much of the last few months”.

We must therefore address the contingent possibility that a threat to the union and to the Belfast agreement might arise. The provisions in Part 5 of the Bill are about creating a legal safety net, taking powers in reserve whereby Ministers could act to guarantee the integrity of the United Kingdom and protect the peace process. The Government never have and never will seek north-south barriers in Ireland; equally, we cannot accept east-west barriers in our customs territory. The imperative here is balance. The prerequisite is reason. In the difficult and highly exceptional circumstances in which we find ourselves, it is right that we take these precautionary steps now.

I can also confirm to the House, as asked by the noble and learned Lord, Lord Falconer, that we will take action, if necessary, in a finance Bill in 2020, to address the issue of tariffs.

We are clear that we are acting in full accordance with UK law and the UK’s constitutional norms in our actions. We do not take this action lightly or without good reason.

Your Lordships will have every chance to consider these matters in Committee, and consider them we must. We cannot set aside our constitutional duty to scrutinise a Bill that has passed through the other place with a healthy majority, as was said by the noble Lord opposite. To do so would be a failure to fulfil our revising purpose. Neither amendment before your Lordships refuses that. They accept Parliament’s right to receive and consider legislation such as this. The effect of the amendments is declaratory. As such, their purpose is to send a message. I hear the message about the importance of the rule of law. We can all assent to that. The noble Lord opposite used the language of “message”. There is another message that some will hear; a message, as he said, to the European Union: if the UK Government and the elected Chamber refuse to accept the EU’s most encroaching demands, your Lordships will deny the UK Government a contingent power to protect our union and safeguard the Belfast agreement.

That, and, still more, a threat to destroy this whole Bill, would be a heavy missile to launch at what is a profoundly delicate state of negotiations, when this Government are seeking to fulfil the firm resolution of the people of the United Kingdom that this country should be a fully independent state. That is the context of these proposals. I am deeply mindful of the wise words of my noble friend Lord Hunt of Wirral and the noble Lord, Lord Skidelsky, that this House should not tie the hands of this Government at this time.

It is the Government’s sincere wish that these provisions need never be invoked. We have listened to the views of those concerned and amended the Bill so that Clauses 44, 45 and 47 can be commenced only following approval by the House of Commons. In addition, I can confirm to my noble friend Lord Lamont that regulations under Clauses 44 and 45 could be made only following approval by Parliament as a whole, which includes your Lordships’ House. In circumstances where your Lordships have the power to set a staying hand, at a time when we will know the state of negotiations between the UK and the EU, it would seem quixotic to threaten, as the noble Lord, Lord Butler, did, to destroy the whole Bill now.

My noble friend Lord Bridges posed a question. The Government do not consider that these clauses, as and when the Bill is enacted, of themselves breach Article 4 of the withdrawal agreement, which requires that those provisions of EU law made applicable by the withdrawal agreement are given effect in domestic law in the UK in the same way as they are in EU member states. However, there is a political question before us as well as a legal one, and a balance of judgment to be made in the national interest. I repeat: the fact remains that there is no negotiated agreement, and the Government must be realistic that we are barely more than two months away from the end of the transition period.

I do not accept strictures around morality, although I note with interest that I now have to seek moral guidance in the House journal of Mammon. It would be irresponsible not to have measures in place in our domestic law that allowed Ministers to protect the UK’s internal market and the Northern Ireland peace process. The Government are making sure that the protocol is implemented in a way that works for Northern Ireland; that is, in a flexible, pragmatic and proportionate way, in line with the approach set out in our May Command Paper. That approach was broadly welcomed by the majority of businesses and political parties in Northern Ireland and is the basis on which we have been negotiating and will continue to negotiate with the EU. However, we cannot and will not allow harmful legal defaults under the protocol to take effect.

In all circumstances, Northern Ireland is and must remain part of the UK customs territory, with genuine unfettered access to the rest of the UK internal market. We must at the very least avoid the European Commission applying its state aid rules to companies in Scotland, Wales or England with no link, or only the most trivial one, to Northern Ireland.

As we have made clear, if these measures were ever needed, their commencement would be subject to a vote in the other place and a take-note debate in our House, as set out in the Government’s Statement on 17 September. Your Lordships would have the opportunity to vote against the necessary statutory instrument, although I of course hope you would not be so inclined—one has to travel in hope.

The rule of law is a great matter, and the integrity of this union is also a great matter. There is a balance to be struck in these difficult times, and proportion to be found. We believe that these measures, with all the safeguards I have mentioned, strike that balance without tying the hands of the Government at a critical time.

What is potentially proposed is not an armed invasion of another nation but a contingent and potential power, subject to safeguards, which the Government have stated they hope need never be invoked. It is presented to Parliament fully in accord with our constitutional norms. 

I urge noble Lords to support the Bill and not to support the amendments in the names of the noble and learned Lord, Lord Judge, and the noble Lord, Lord Cormack.

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13:55

Division 1

Ayes: 395


Labour: 137
Crossbench: 104
Liberal Democrat: 80
Conservative: 39
Independent: 21
Bishops: 7
Green Party: 2
Ulster Unionist Party: 1
Plaid Cymru: 1

Noes: 169


Conservative: 158
Independent: 5
Democratic Unionist Party: 4
Crossbench: 1
Ulster Unionist Party: 1

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

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

(3 years, 5 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 135-II Revised second marshalled list for Committee - (26 Oct 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Lord Fox Portrait Lord Fox (LD)
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My Lords, if the Ministers shepherding this Bill expected an easy ride, this gives a taste of things to come. It serves a purpose in setting the scene, and a lot of arguments and debates will come in other groups as we go through this process. I shall not labour those points. An overriding sense I got from my noble friend Lord Purvis is that the question everybody wants to know the answer to is: why have Her Majesty’s Government decided to turn away from a process of managing markets that has been extremely successful? It was successful before we joined the European Union and successful afterwards. This is the overriding question that hangs over this whole debate.

On Amendments 1 and 112, if ever we needed convincing that things such as the environment need to be written into the Bill, the speech by the noble Lord, Lord Naseby, convinced me that they do. This is because we cannot take things for granted. Governments come and Governments go, but the law stays, and we need to be sure that our public policy is being directed properly. I uncharacteristically find myself somewhat agreeing with the noble Baroness, Lady Noakes: we have to be careful not to constrain the nature of this Bill. We need to find a way to write in issues such as those of the consumer and the environment. I would add some of the points made by my noble friend Lady Bowles and food safety to that. We need to ensure that there is an assessment of the success of this internal market in some of those areas, including the environment, the effect on consumers, the effect on jobs, et cetera. I share the view of my noble friend Lady Bowles that perhaps more work is needed, but the issue is live and very important. I thank the proposers of the amendment.

Turning to Amendment 2, I do not think proportionality pops up anywhere in other amendments. We had a brief discussion of this extremely important subject from various speakers. I take my lead on this from the noble and learned Lord, Lord Hope, who understands the law, and my noble friend Lady Bowles, who knows a thing or two about regulation. If they are concerned about proportionality, so are we on these Benches. The Government need to find a way of writing that issue into the Bill.

On public procurement, we need to understand what the Government mean by what they seek to do in this legislation. The issue highlighted by my noble friend Lord Purvis is live and real: how will this legislation affect those issues? It is a probing amendment, but for it to work we need answers.

We have started. There are issues we shall return to, but proportionality and public procurement are two on which I hope the Minister will respond at length.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, let me open by thanking noble Lords for their contributions at Second Reading last week. Again, the contributions have demonstrated the tremendous breadth of expertise in this House. This is indeed a crucial piece of legislation. In this respect, I agree with the noble Lord, Lord Fox, and I look forward to providing the scrutiny it deserves and that I am sure it will receive from noble Lords, beginning today and in the days and weeks ahead.

Let me reassure, and to some extent disagree with, my noble friend Lord Cormack, which will not come as a surprise to him. We are not riding roughshod over the devolution settlements. The devolved Administrations will acquire dozens of new powers that they have not exercised before once we leave the EU transition period. The Bill is about ensuring that those powers are exercised in a non-discriminatory manner, but they will acquire new powers and new responsibilities. Before I address the specifics of Amendments 1, 2, 59 and 112, which we are discussing in this first group, I want to remind to noble Lords of why we need this Bill and the context of Part 1.

By opening with the purpose of the Bill, I hope to explain why these four amendments, which seek to alter the Bill’s core principles, are not necessary. The Bill aims to allow the continuing smooth functioning of our UK internal market at the end of the transition period. As we set out in the White Paper, and as I explained at Second Reading, the Bill will establish a market access commitment by enshrining mutual recognition and non-discrimination in law. Part 1 concerns itself with delivering this market access commitment for goods. The principle of mutual recognition is that goods and services from one part of the UK will continue to be recognised across the country. This will ensure the devolved Administrations will benefit from their additional powers and freedoms outside the EU. As the transition period ends, they will gain increased powers, as I said to my noble friend Lord Cormack, to set their own rules and standards across a wide range of policy areas within their competence. At the same time, it provides firm assurance to our businesses 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 the business is based.

I say to the noble Lord, Lord Empey, that the 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. The Bill will also affirm the principle that those goods are not subject to checks, controls or administrative processes as they move from Northern Ireland to Great Britain. I hope that I can reassure the noble Lord on that point. This means we will fulfil our commitment to legislate for unfettered access, as we promised to the people and businesses of Northern Ireland. This will ensure that businesses and citizens in the United Kingdom can continue to trade freely across the four nations.

With this context in mind, I turn to Amendments 1 and 112 together. These seek respectively to limit the purpose of Part 1 and the Office for the Internal Market’s statutory objective to the protection of the environment and consumer interests. Now, it goes without saying that the protection of the environment and consumers is hugely important, and something that we as a Government are already committed to. The UK, as I never tire of repeating, has some of the highest standards in the world, and we will continue to improve these ahead of others. We remain committed to being at the forefront of environmental protection and a leader in setting ambitious targets to prevent damage to our natural world, building on our already strong environmental record. For example, we have set out a range of new policies in the Environment Bill that are designed to drive up environmental standards in line with the UK’s priorities.

The statutory objective of the Competition and Markets Authority—acting as the Office for the Internal Market—ensures that the office is able to effectively operate as the monitoring body for the internal market, and that there is no confusion between the pre-existing powers of the CMA and those newly conferred on it as the OIM. Distinct objectives will prevent any operationally problematic blurring of functions.

As my noble friend Lady Noakes observed, the office will operate for the benefit of all those with an interest in a smooth-functioning internal market, whether that be regulators, businesses, professionals, the four legislatures or indeed consumers. Explicitly narrowing its focus to consumers would be to the detriment of all the others that I have listed.

Moreover, the functions set out in Part 4 of the Bill clearly establish that the office will consider the economic impacts of regulatory measures on the internal market. Although some of these will of course be environmental protection measures, it will not be authorised to opine on the extent to which these measures safeguard the environment, because this would risk duplicating the role of existing public bodies with a purely environmental focus. As such, given how much the Government are already doing in the area of consumer and environmental protection, I consider that these amendments, which seek to change the purpose of the Bill, are unnecessary, and I hope that I have been able to persuade my noble friend Lady McIntosh and the noble Baroness, Lady Hayter, to withdraw Amendment 1 and not move Amendment 112.

Amendment 2 aims to introduce the principles of proportionality and subsidiarity into the Bill as additional market access principles. These are European law principles. We have now left the EU and are free to organise our internal market in a way that is better suited to the UK’s unique constitutional arrangements and common-law systems. I agree with my noble friend Lady Noakes that the market access principles will protect seamless trade and jobs across all four corners of the United Kingdom following the end of the transition period in December 2020. They have been designed for the UK’s specific devolution arrangements and legal approach, and they already take account of the need for reasonableness and respect for devolution. In contrast, the proposed amendment would muddy the waters with EU concepts that in our view are ill-fitting in the UK. For these reasons, the Government cannot accept this amendment and I hope that noble Lords will not move it.

Amendment 59, on which there was considerable discussion, seeks to disapply the market access principles from the public procurement rules. I assure the noble Baroness, Lady Hayter, and the noble Lords, Lord Purvis and Lord Fox, that the principles proposed in the Bill will not typically operate in the area of public procurement, and indeed that we intend to legislate separately in this area via a wider package of procurement reform, on which we will shortly consult. The market access principles are not relevant to procurement as they are about how business is regulated. The procurement rules cover how public authorities carry out their procurement function. We believe that the risk of divergence can be effectively managed through a combination of close devolved Administration engagement and use of the common frameworks, and we are working to develop a concordat on expected public procurement practices and policies between the four UK nations.

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Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, while I am grateful that the Minister has confirmed to me that a piece of legislation that has been made fully compliant with our single market—the deposit return scheme—will now come into scope under this legislation, because it is not yet in force in Scotland, that will be of very significant concern to Members of the Scottish Parliament, who legislated in good faith in a perfectly legal way. This Government have now said that that will come into scope, contrary to the market access principles, because it will not be able to be afforded protection if it is challenged in court because of the lack of environmental objections. I take the Minister’s point that he believes that it will be brought under the scope of market access principles, so I would be grateful if he could write to me to explain how indeed that will happen. If it is under a framework, we are back to exactly where we started, which is that the best approach on all these aspects is a framework.

That leads me to the question that I wish to ask him, because he did reply to the question that I asked about the status of the agreement made between the UK Government and the devolved Administrations on the framework agreement. In the document of September 2020 on the framework analysis, the Government repeated what that agreement was. I will quote from it again for the Minister: it was to

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

The document goes on to say:

“These principles continue to guide all discussions between the UK Government and the devolved administrations on common frameworks.”


What is the basis of that document and that commitment, given what the Minister has just said in responding on this group: namely, that that is an ill-fitted set of agreements because we are now out of the EU? What is the status of the agreement that was made over the frameworks?

Lord Callanan Portrait Lord Callanan (Con)
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Well, as I have said before to the noble Lord, we remain completely committed to the framework process and we remain committed to frameworks that have already been agreed—but we see this legislation as complementary to that, as it underpins the entire framework process. As I said to him with regard to the deposit return scheme, if it comes into force when it is predicted to do so, then indeed it will be covered by the market access principles, but we are confident that the deposit return scheme can be brought into effect in full compliance with the market access principles.

Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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I am slightly lost on that, but we will come back to it. I thank the Minister for his response and I am grateful for the very interesting debate that has happened. I will say a few words about what was said by the noble Baronesses, Lady Noakes and Lady Bowles, about the point of competition and why it should be here. I agree with the noble Lord, Lord Naseby, that competition is extremely good for consumers. We want to see a successful economy, and I see no difference whatever in what he was spelling out and what we want to achieve.

The problem, of course, is where, for whatever reason, there is not a perfect market. Although here we are talking about goods rather than financial services, I was involved in the Financial Services Consumer Panel, and even though we had and still have—although Covid is throwing everything out—a thriving financial services market that has been good for the economy, for consumers and for the taxpayer, it has sometimes been, as we know from all the compensation that had to be paid, at the expense of consumers. So we cannot assume, simply because we have a good, thriving economy and lots of competition, that there are not sometimes disadvantages for consumers. That is why it is important, while we want a competitive, thriving market, to make sure that those protections are there. So as we look forward to the internal market being all the things that have been described, it cannot be at the price of consumers.

As I have said, I really support competition—we all used to wear NHS glasses until someone freed up the market, so we are all able to get nice red ones now. I doubt there is anything much between us on that. It is important, though, as we look forward to a market that is going to work for the whole UK, that it is not at the expense of consumers or the environment. I have been buying plants recently, hoping that one day we will have some good weather, but they should not be in peat pots. That is not good for the environment. Something may be good for consumers and at a good price, but you also need to consider the environmental aspect.

Consumers are not just interested in price; they are interested in safety and the longevity of products. However, that is not always something they can see at the point of purchase. Price is very easy for consumers: they can look at it and compare. Other things behind the price are also important. It is important as we look to a new market mechanism that we take that into account. I am sorry to have gone on a bit about this issue but as we will come back to it on Report, it is probably helpful for the Minister to understand. We may not have got the wording quite right: I am not trying to trump the Government but to point out why those elements need to be included.

On the devolution issue, the noble Lord, Lord Empey, is right that there is a clash between the settlements and what we are now trying to do with the internal market; I think he called it a collision between London and the regions. I hear very much what the noble Lord, Lord Cormack, said: that if we get this wrong, we are threatening something much bigger than any of us thought. No Brexiteer wanted to challenge the union; that was not what divided some of us who had divisions on that issue.

We need to look at how we deal with devolution. I was really taken by the example that the noble Lord, Lord Inglewood, gave of the IGC process that led to the single market and other things. I will come on to that way of working when we consider a different group of amendments. The confidence to do things in a shared and consensual way is important. The noble and learned Lord, Lord Hope, said that it would probably be important to put in the Bill retention of the subsidiarity and proportionality principles. They have guided us well and there is no reason why we should lose them, just because we are leaving. I think we will return to that issue.

On procurement, I think the arguments were fairly common between us. I am afraid I was slightly thrown by what the Minister said and will have to read later exactly what he said about separate legislation. Maybe we can exchange correspondence on that issue, and on the timing. Clearly, we will need to come back to procurement to ensure that we have something that will work for all four nations. For the moment—and I am sorry about the length of my response—I beg leave to withdraw the amendment.

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Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
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My Lords, I thank all noble Lords who have spoken, particularly the noble Lord, Lord Hain, the noble Baroness Ritchie of Downpatrick, my noble friend Lady Altmann and the noble Baroness, Lady Suttie, who all signed the amendment. I congratulate the noble Lord, Lord Hain, on the measured and thoughtful way in which he presented his case, and on his ingenuity in getting this amendment in so early in the Bill, so that the Committee can debate this important topic, which is one of the abiding matters of interest in the Bill. I do not demur from sensing the opinions the House has expressed on aspects of the Bill, even if I do not agree with them.

I will and must, as invited, repeat the assurances that the Government gave to the House at Second Reading last week, and will do so again when the Committee turns more fully to the Part 5 clauses. I say again, without demur or cavil, that the Government’s overriding priority has been, and will remain, to protect the Belfast/Good Friday agreement and the gains of the peace process. We agree with all noble Lords who have spoken on that fundamental objective. I assure the noble Baroness, Lady Suttie, that Her Majesty’s Government always give the most careful consideration to the impact of any of their actions in this important respect.

I was asked about the human rights aspect. The Government are, of course, committed to the European Convention on Human Rights. We have made that clear before, time and again. However, we have brought forward amendments to the Bill clarifying that regulations made under clauses which the Committee will discuss later will be subject to judicial review on public law grounds. That will provide an effective remedy in the theoretical and limited scenarios in which regulations might conceivably interfere with convention rights. My noble friend has obviously made the due statement on the European convention on the face of the Bill.

The Government’s commitment to the Belfast/Good Friday agreement and to the peace process is beyond question. We all acknowledge the importance of the delicate balance across communities in Northern Ireland. We should all reflect on the importance of not letting opinions and comment flow which suggest, either within or outside these shores, that this Government, this party, the party opposite or any Member of this House do not believe that this agreement is fundamental. We do. Where we differ is that the Government do not agree with many noble Lords who have spoken that the United Kingdom Internal Market Bill undermines the Belfast agreement. On the contrary, the Bill delivers on our commitment to unfettered access for Northern Ireland businesses to the whole UK market. In so doing, it supports the economic and social links between Northern Ireland and the rest of the United Kingdom. In that way, it complements the provisions of the protocol which avoid a hard border on the island of Ireland. It is, and remains, the Government’s position and policy that there should be no such border. The Bill supports the interlocking and interdependent elements of the Belfast/Good Friday agreement.

The Committee will come back to the questions of the rule of law in detail in Part 5, but I repeat what I said at Second Reading: the Government believe that presenting this Bill to your Lordships’ House, and the fact that it passed through the other House, is in accordance with our constitutional norms and does not infringe the rule of law.

Northern Ireland Peers voted, by a majority, against the amendment moved by the noble and learned Lord, Lord Judge, at Second Reading. That was not every Peer from Northern Ireland and I accept that it reflects differences of opinion. We have to note and respect that. The noble Lords, Lord Kilclooney and Lord Trimble, both of whom negotiated and signed the Belfast/Good Friday agreement, voted against the amendment your Lordships agreed to at Second Reading. I repeat: it is the firm resolve of the Government to maintain, and ensure compliance with, the Belfast/Good Friday agreement, and so I disappoint noble Lords who have spoken. I do not believe that the addition of these amendments to the Bill is necessary.

Turning to the references in Amendments 3 and 177 to the Northern Ireland protocol, again, as I have set out, the Government are committed to implementing the withdrawal agreement and the Northern Ireland protocol and have already taken many practical steps to do this, and continue to do so. I assure the noble and learned Lord, Lord Falconer, and others that we are continuing to work with the EU in the joint committee to resolve outstanding issues arising from the Northern Ireland protocol. Our priority is to secure the outcomes that we need in that forum, working in a spirit of good faith, so that the protocol can be implemented in the pragmatic and proportionate way intended. This is intended to give the best platform for it to command support across the whole community in Northern Ireland. Let me repeat: as a responsible Government, we cannot allow the economic integrity of the UK’s internal market to be compromised inadvertently by certain provisions in the protocol without a safety net in place. The Government have been clear in our statements, including on the criteria set out by the Government on 17 September, that these provisions would, in any case, be used only where, in the Government’s view, there had been a material breach by the EU of duties of good faith or other obligations, and be used in parallel with the dispute resolution procedures that the protocol itself establishes.

These amendments as drafted could remove, prevent or suspend our ability to act in the interests of the people of Northern Ireland, and so ensuring they are treated as our countrymen and countrywomen with equal access to the UK internal market. Furthermore, they could leave core elements of unfettered access—not only the safety net provisions—in a state of consistent uncertainty and open to persistent litigation. It is far from clear how compliance with the Northern Ireland protocol, for the purposes of these amendments, would be assessed or who would make the assessment. For example, it is possible that all the provisions in the Bill could cease to have effect if the EU alleged a breach of the Northern Ireland protocol. Any dispute then would be resolved by the appropriate dispute resolution mechanism, which in some cases would include the jurisdiction of the CJEU. That cannot be the means by which we safeguard the links between Northern Ireland and its most important market, Great Britain, which is the subject of the Bill. That cannot be the means by which we safeguard the interests of Northern Ireland from the end of the transition period and beyond.

I am well aware that we will return to these important matters in great detail later in Committee. At this point, however, I urge noble Lords to withdraw or not move the amendments. Before I do, I refer my noble friend Lady McIntosh to the whole of Clause 1(3), which says, as she quoted:

“Those principles have no direct legal effect except as provided by this Part.”


If she looks at the Bill, she will see that in the rest of that part there are number of provisions for secondary legislation. I apologise for that divergence, but I felt I should answer that point. I return to the fundamental position: this Government are wholly committed to the Belfast agreement, they cannot accept these amendments and I urge the noble Lord to withdraw his amendment.

Lord Hain Portrait Lord Hain (Lab)
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My Lords, I thank the Minister for his courtesy and all those who have spoken in support of these amendments. I note that a third of the speakers are from the Minister’s own Benches. I think that shows that there is cross-party, cross-Bench support for the principles that these amendments enunciate.

My noble friend Lady Ritchie of Downpatrick spoke with passion about how this Bill, without these protections, imperils the Good Friday agreement. I want to return to that point when I pick up some of the arguments used by the Minister in a moment.

The noble Baroness, Lady Altmann, made a telling point: why are the Government not accepting their own policy? If their policy is, as the Minister states—I accept that in good faith—that the Government support the Good Friday agreement and the Northern Ireland protocol in protecting the Good Friday agreement, why are they not accepting these amendments? If there is some technical issue, and I will return to one of the issues he raised, we could discuss wording and come to an agreement. I ask the Minister to look carefully at what the noble Baroness, Lady Altmann, said about the Government’s own policy being reflected in these amendments. At least, we think it is the Government’s own policy.

The noble Lord, Lord Carlile of Berriew, spoke with great authority because he has spent many years on this. As Secretary of State, I worked with him on this and his review of terrorist legislation, as did the noble Lord, Lord Cormack, who was a distinguished chair of the Northern Ireland Affairs Committee in the other place. He was hugely respected on the island of Ireland for his diligence and the conscientious empathy he showed towards the situation in Northern Ireland.

The noble Baroness, Lady McIntosh, again speaking from the Minister’s own Benches, was compelling on the fact that this should be a cross-party matter. It was, of course, John Major, as she said, who played a crucial role in the lead-up to the Good Friday agreement that enabled Tony Blair to pick up the baton and drive it forward.

Another contributor to this debate, the noble Baroness, Lady Suttie, to whom I am also grateful to for her support for these amendments, speaks with real authority, particularly about what is at stake here. This is not some technical issue; this is about the future of peace in Northern Ireland. My noble and learned friend Lord Falconer, spoke also about the importance of keeping that border absolutely open on the island of Ireland, to take the process of peacemaking forward.

I ask your Lordships’ House to note that the Minister did not explain how the Bill upholds the Good Friday agreement. He asserted it, but he did not explain how it upholds is, especially given that it repeals the Irish Northern Ireland protocol. On Report, I would urge him to explain in great detail—if necessary, in technical detail—how he thinks the Bill actually upholds the Good Friday Agreement. The majority of contributors to this debate—in fact, everybody except him—dispute that. That is the problem that the Government face in setting their face against these amendments.

Unless there is an ulterior motive here, and I am not suggesting that of the Minister personally but of No. 10 Downing Street, I do not understand. If there are concerns about the implementation of the Northern Ireland protocol, there is a committee, as I mentioned in my speech, co-chaired by Michael Gove with a representative of the EU, to iron out the detailed implementation points. It is a joint committee. That makes us all think that there is something much more serious at stake here, which is undermining the whole foundation of the protocol and, indeed, of the Good Friday agreement with which it sits in partnership.

To conclude, this is a series of very modest amendments. They ask the Government to uphold their own professed policy. That is all they are doing. They are not suggesting some revolutionary change in the Government’s policy. They are asking them to uphold their professed policy on the island of Ireland, in particular on continued progress in Northern Ireland. Meanwhile, I will seek leave to withdraw the amendment.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, as the noble Lord, Lord Dunlop, said, this debate is a sort of appetiser for the main course to come in later groups, when we will dig much deeper into the right approach to ensuring that our current well-functioning internal market continues after the transition period ends and that we can manage the necessary and inevitable policy divergences that we need across the United Kingdom and should welcome.

The noble Lord, Lord Bruce, said that the key questions are why we need the Bill at all, let alone now, why the Government are ignoring the evident successes of the co-operation and constructive progress which have been hallmarks of the common framework programme, why threaten the devolution settlement so directly, and what it is about the top-down approach that the Government wish to introduce that is so attractive, given the huge risks to devolution. Those are very important questions and I look forward to hearing what the Minister says when he comes to respond.

The noble Baroness, Lady Neville-Rolfe, said that she recognised the value of proposed new subsections (1) and (2) in the amendment but was worried that proposed new subsections (3) and (4) made it a wrecking amendment. I do not think that it is. Indeed, I make the same points about the need for a pause before we implement in my Amendment 178, which is in a later group.

I hope that the Government will think very hard about the clear message that seems to come from this debate. We need to carry on down the road well travelled in recent years, encouraging the devolved Administrations to continue to collaborate, to work together with mutual understanding until agreement is reached, and then to go further so that there is agreement on all the issues that need to be agreed and a way of resolving any issues that are left over. This is the way in which we make progress—not by imposing a top-down solution. Indeed, anything else risks destroying the complex but pretty successful devolution settlement that we currently enjoy.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, Amendment 4, tabled by the noble Lords, Lord Fox and Lord Purvis, would prevent the market access principles applying by the end of the transition period. As my noble friend Lady Neville-Rolfe pointed out, that would produce a considerable delay in providing certainty to businesses that free trade can continue within the UK’s internal market.

I heard the noble Lord, Lord Bruce, query my assertion at Second Reading about business support for these measures, but over 270 businesses and organisations responded to the public consultation on our proposals and, overwhelmingly, businesses supported our approach. Particularly as they look to recover from the impacts of Covid-19, businesses need certainty, and that is what this Bill, as drafted, seeks to provide.

I repeat that the aim of the Bill is to ensure that there are no internal barriers to trade within the UK, while respecting the devolution policies. All devolved policy areas will stay devolved. The proposals ensure only that no new barriers to UK internal trade are created. The Bill aims only to procure frictionless trade, movement and investment between all nations of the UK. The policies that different parts of the UK choose to pursue in the future is a matter for those Administrations. The Bill ensures that these local policies can be pursued while, at the same time, maintaining seamless trade in the UK internal market.

The noble Lord, Lord Bruce, asked me specifically about barley, and indeed the noble Lord, Lord Purvis, has written to me on the same subject. We believe that this provides a good example of the risks that businesses could be exposed to. Food produce placed on the market must comply with rules on pesticide maximum residue levels. These are currently set at EU level, and so are consistent across the United Kingdom, meaning that food can be traded across the devolved Administrations. This is an example of a policy area which will be devolved after 1 January. At the moment, all Administrations are supported by the same regulator—the Health and Safety Executive. That will, to a certain extent, aid consistency, and we are of course committed to working closely with the devolved Administrations to jointly agree consistent maximum residue levels across Great Britain.

However, without the Bill’s mutual recognition provisions, there would be the possibility of divergent decisions being taken, which would then introduce new trade barriers on food between different parts of our country. Depending on any particular decision, this could affect any agricultural or horticultural produce that has been previously treated with pesticides. For example, different residue rules might mean that it is not lawful to sell in Scotland barley grown in England.

More broadly, without the principles set out in the Bill, harmful divergence would be possible, in spite of the important protection provided by industry standards. That is because industry standards are voluntarily agreed between private economic actors and so cannot provide the same certainty for businesses and investors as the legislative principles set out in the Bill.

The consent process proposed in the amendment would remove that certainty and make operating conditions for businesses across the UK dependent on a number of fairly onerous conditions. These conditions include matters that would cut across ongoing collaborative work with the devolved Administrations. I say to the noble Lord, Lord Bruce, that these include the common frameworks programme and the intergovernmental relations review, both of which the Government are fully committed to pursuing. Indeed, in the next group, we will examine the common frameworks principles in more detail, and my noble friend Lord True will explain our position in more detail.

However, I assure noble Lords that the Government have already committed to appropriate consultation with the devolved Administrations on these matters. Furthermore, we are engaging them in all suggestions for how practically to improve intergovernmental relations, including both the machinery, such as dispute resolution, and the way in which these joint forums are run.

The noble Lords, Lord Fox and Lord Purvis, asked a question about dispute resolution. I can tell them both that the office for the internal market will support existing arrangements for dispute resolution. Its non-binding reporting will ensure that evidence-based dispute resolution takes place in line with the current memorandum of understanding on devolution. The OIM’s reporting will be available to all four Administrations and legislatures on an equal and purely advisory basis. It will provide information and support separate political processes to resolve any disagreements and enable intergovernmental engagement. The amendment would cut across all ongoing collaborative work with the DAs and remove our ability to give businesses the certainty they need at this time.

The noble Baroness, Lady Randerson, said that the Government would override the rest of the UK when legislating for England. That is certainly not our intention. The nature of our constitution is that the UK Parliament will be able to legislate over existing legislation, but the Bill aims to treat all domestic legislation in the same way. Her Majesty’s Government will be cognisant of the importance of market access principles in supporting any extra legislation.

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Lord Wigley Portrait Lord Wigley (PC) [V]
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My Lords, the Minister cited the example of pesticides, a subject on which there will almost certainly be unanimity. But on matters such as subsidy control, where there may be a justifiable difference in approach, does the Minister not accept that unless the Government are willing to accept a mechanism such as this to secure consent from the devolved Administrations, he is in effect imposing his solution on them, and cannot in any way claim that this Bill is agreed by the devolved nations—with all the consequences that flow from that unfortunate situation?

Lord Callanan Portrait Lord Callanan (Con)
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The Bill would legislate for subsidy control becoming a reserved matter. We are committed to consulting further with the devolved Administrations before proceeding, if we do, to any further legislation.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con) [V]
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I have two questions. First, I called for clarity, trying to explain its importance to organisational success, which, frankly, is very relevant. I noticed almost no support for this from the Benches opposite, yet businesses, citizens and professionals will have to manage in the new market, and if the rules are at risk of changing in different ways regularly, that could be a problem. Obviously, sensible consultation and collaboration are needed, but we must be wary of a political veto. Does the Minister agree that this is a problem, or is the noble Lord, Lord Purvis, right?

My second question is whether the noble Baroness, Lady Randerson, is right or I am. At Second Reading, I mentioned with approval the ability of the devolved territories to do their own thing and gave two examples: minimum pricing of alcohol and carrier-bag charges, both of which I supported at the time. The noble Baroness, Lady Randerson, suggested that the powers to do such things will be undermined, and quoted exactly the same examples. Am I right or is she right?

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Lord Callanan Portrait Lord Callanan (Con)
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My noble friend is putting me in the very difficult position of choosing which noble Baroness is correct. If I might venture to say, on the measures she has quoted my noble friend is correct. The Bill has no effect on minimum pricing of alcohol; that is excluded as a policy area, as are all pre-existing measures. This would also apply to carrier-bag prices. The Bill provides clarity and certainty for businesses, which is what we seek.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I take it as a little chink of victory that the Minister found it difficult to say whether he agreed with his noble friend or me. I will secure that as an achievement of the day, if he does not mind. I will return in a future group to minimum unit pricing and single-use carrier bags, because I am not convinced about that position.

I suspected that the Minister would refer to pesticides, so I took the liberty of reading the Health and Safety Executive’s board report on the framework, which has now been agreed, on pesticides and maximum residue levels. That agreement has been reached, so the concern the Minister is putting forward, of a threat to the operation of the single market, does not exist. That will be a UK-wide provision, and the regulations for Scotland are about policing it. The approach of the HSE has been well established for many years, and the regulation required to police this in Scotland is quite different from what the Government are asserting, which is the exercise of a power that would effectively prohibit goods from entering a Scottish market. That is notwithstanding the fact that if it concerns what is ultimately used for produce such as whisky, it is an industry standard, based on the minimum base that would be taken. The chemicals and pesticides framework from Defra and HSE has been resolved, so perhaps the Minister should stop using this an example. It is not convincing.

Regarding the office for the internal market, the Minister has now said something new: that the CMA, the parent body of the OIM, is involved in existing disputes under the Joint Ministerial Committee’s memorandum of understanding that was agreed after devolution. This will be news to the CMA. Can the Minister repeat that the CMA has a role in the Joint Ministerial Committee’s disputes, under the memorandum? That is what he said in response to the question, but it is not the case. As outlined in the Bill, the OIM has no role in disputes. If the Minister is saying that the dispute resolution mechanism for the internal market is the JMC memorandum of 20 years ago that was agreed for devolution, it simply will not work, because it does not provide for the operation of the single market.

Lord Callanan Portrait Lord Callanan (Con)
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The noble Lord asked a number of questions, and I am sure he will be quick to write to me if I do not answer all of them. On the famous subject of barley and pesticides, he is correct, but the whole point about frameworks is that they are voluntary agreements. Any one of the Administrations can walk away at any time. We are committed to agreeing voluntary frameworks and will continue to take part in those discussions and advocate them, but the point of this legislation is to provide a legislative underpinning for all of the work taking place on frameworks.

Could the noble Lord remind me what the other questions were?

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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I am grateful to the Minister and may well be writing to him on that basis, as he predicted. Can he clarify what the intended role of the office for the internal market will be under the CMA? In a previous answer, he indicated that it has a role in the dispute resolution mechanism in the devolution memorandum of understanding. My understanding is that it does not. Which is the case? If the intention is that the OIM has a role in the dispute resolution mechanism, there is no reference to that in the legislation.

Lord Callanan Portrait Lord Callanan (Con)
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The purpose of the office for the internal market is to provide advice, reports and monitoring to all four Governments and legislatures. It will have no direct role in dispute resolution, which will be a matter for the Joint Ministerial Committee to discuss.

Lord Fox Portrait Lord Fox (LD)
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My Lords, I apologise to the Deputy Chairman of Committees for having jumped in so soon. I thank all noble Lords for their contributions; the subsequent questions were worth waiting for, so I am glad that I did not plough on.

This has been an interesting debate; however many more hours we will have in Committee, it has uncovered above all else how half-baked—how completely undercooked—this Bill is. It is not worked through. The point of this amendment was to highlight, and give the Government, an opportunity to step back and admit that there are so many open questions and so many issues. I feel sorry for the Minister—I rarely do, but on this occasion I do—because he is having to respond to things that have not been properly locked down in this legislation. So I will look at Hansard, but it is quite clear that, one way or another, we will have to come back on Report to these absolutely central issues. Having said that, I beg leave to withdraw Amendment 4.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, this has been an excellent debate, brilliantly introduced by my kinsman, the noble and learned Lord, Lord Hope of Craighead, and with some other excellent speeches, particularly from those who were members of your Lordships’ Select Committee and, of course, the chair, my noble friend Lady Andrews.

The weight of the arguments deployed in this group and the virtual unanimity of views expressed from all sides of the Committee were to be expected, but Ministers might not have expected to be offered a route out of the mess that they have got themselves into. If common sense prevails, there is a win-win here. As the noble Lord, Lord Dunlop, said, the Bill currently has things the wrong way around. The Government need to signal tonight that they will take away the amendments in the name of the noble and learned Lord, Lord Hope of Craighead, and work with him to find a structure that better delivers the aims of the Bill.

They should use this legislative opportunity to encourage the completion of the current work on the common frameworks, to encourage the process to cover the remaining outstanding issues and to anticipate future needs. They should then draft an effective safety net for the Bill, based on mutual recognition and non-discrimination, while, as the noble Lord, Lord Vaux, said, having regard to subsidiarity and proportionality. They should ensure that the current informal processes have a light-touch underpinning, with a regulatory framework that commands trust and the confidence of the devolved Administrations. If they do this, we will happily work with and support them.

Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
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My Lords, it has been a most fascinating debate. I endorse what the noble Lord, Lord Stevenson, has just said. While I sadly cannot claim to be his kinsman, I thought the opening speech by the noble and learned Lord, Lord Hope, was a masterclass in how to present a case. That does not necessarily mean that the Government accede to the case, but it was entirely clear. I also pay tribute to those members of your Lordships’ Select Committee on common frameworks who spoke. Their experience is obvious and the work of that committee is important. I believe it will shortly meet or hear from my honourable friend Chloe Smith.

Many businesses welcome this Bill. They welcome it on the basis that, after the end of the transition period, they hope, expect and require that they will be able to operate in a period of certainty, not buffeted by any unexpected or unreasonable developments. I respond to the general tone of the debate by saying that it is, of course, the Government’s intention—it always has been and remains so—that the functioning of the UK internal market will be driven by co-operation with the devolved Administrations. The market access proposals here are designed not to replace but to complement the common frameworks; I know that is a phrase I have used before. The common frameworks are the key. They support coherent policy-making across the UK by setting out terms of engagement between the UK Government and the devolved Administrations as well as, where appropriate, common strategic goals and policy approaches.

The Government remain committed to the common frameworks programme. As many noble Lords have said, it is progressing well. The UK Government and the devolved Administrations continue to co-operate closely as we jointly develop the programme. Yes, progress overall has been slower than we would have liked, and I acknowledge the effect of the resource constraints driven by the response to Covid, and the need to prioritise planning in advance of the end of the transition period. However, all parties remain committed to the programme. At a recent JMC (EN) meeting last month, both the UK Government and DA Ministers reconfirmed their strong commitment to it.

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Lord Bruce of Bennachie Portrait Lord Bruce of Bennachie (LD) [V]
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I shall not detain the Committee for long but the Minister came up with the example of flour. I think that as the Bill progresses we can all dream up examples of hypothetical possibilities. However, the question that arises from that example is: why should we not follow the principles and dispute resolution model of the common frameworks? Indeed, as the noble Baroness, Lady Andrews, said, where are the gaps that cannot be filled by the common frameworks? Why do the Government need to take such extreme powers for fast Executive action when, in nearly all these cases, the problem will emerge over time? Everybody agrees that if legislation is required, we should have it, but the Government seem to want to take powers in anticipation of unknown challenges. Therefore, why cannot the principles and model of the common frameworks be the basis on which these cases are taken forward and disputes resolved?

Lord True Portrait Lord True (Con)
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My Lords, I should have acknowledged the very thoughtful speeches of the noble Lords, Lord Bruce and Lord Stevenson. I hoped that I had made clear that the common frameworks process would continue. I was asked to give an example of how circumstances might change in the future and how matters that need to be addressed might arise. The emergence of an unregulated new technology might be another example. However, I think it is better that we address these questions in the further discussions that we might have.

So far as pace is concerned, the transition period ends at the end of the year and there is a need to provide a climate of certainty for business when the EU system falls away. Therefore, I do not resile from the fact that it was necessary and sensible for the Government to bring proposals before Parliament to address the post-31 December situation.

Lord Hope of Craighead Portrait Lord Hope of Craighead (CB) [V]
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My Lords, first, I thank the Minister for his courteous and careful reply. I also thank all noble Lords who have contributed to this fascinating and very well-informed debate. I shall not attempt to sum it up because the noble Lord, Lord Bruce of Bennachie, did that very ably for me in his contribution before the interval.

I was very grateful to the Minister for his kind opening words. Of course, I am disappointed that there is not more of an indication of movement on his part, but he said that he would consider the arguments, which I am sure he will, and that he was open to further engagement and discussion—for my part, I certainly am, and I am sure that others across the Committee are too. Of course, there is not much point in those discussions unless he has a rather more open mind in appreciating the problems than he has indicated so far.

One point mentioned from time to time was the fact that this measure, and indeed the White Paper that preceded it, emerged with very little consultation with the devolved Administrations. I hope that the noble Lord will forgive me but I have the feeling that there was a certain amount of lack of consultation across the Government.

If I may offer the Minister a little bedtime reading, there is a clause in another Bill which is still before Parliament that illustrates the problem: Clause 39 of the Agriculture Bill. I do not suppose that the Minister knows what I am talking about so I will say a few words about it. It may help him—the Minister sitting in Westminster, looking at the matter from the other side of the fence—to see how things appear from the perspective of the devolved Administrations.

Clause 39 attempts to set marketing standards. It lays down a basis for the setting of market standards in relation to agricultural products that are marketed in England. It contains a long list of matters that will be covered by regulations—there are 15 of them. I will not go through the list, but one or two of them are important. They refer to regulations or cover matters about the type of farming and production methods, as to the use of certain substances and practices—one might think of pesticides, additions of flour—packaging and so on. At the discussions on the Agriculture Bill, I asked the Minister what this means for the farmers in Wales, Scotland and Northern Ireland, given the volume of goods that they move for marketing in England, since these are matters that have been set for all goods marketed in England. There is no reference in this clause to consultation, let alone consent, and my suggestion was that there should be, on the face of the Bill, a provision that if these standards are to be set and people coming from other parts of the UK are obliged to comply with them, then surely that would have to be done with consent. I do not think that the Minister responding to me had any idea that the Internal Market Bill was on the horizon. I mentioned that the White Paper had just come out, but I got no response from him about that either.

The effect of the mutual principles set out in Clause 2 solves the problem as far as farmers in Wales and Scotland are concerned. They need not trouble themselves about regulations, additives, pesticides, packaging, production methods and so on, because they have a complete opening to the market. The question is: is there any point in going through this huge list and laying down carefully regulated provisions for England when the Minister knows perfectly well that people can come from the other parts of the UK under his Bill and ignore them? I am not talking about a lowering of standards, but about different standards which are not provided for. That is the kind of problem that I mean. Can the Minister look at this before he goes to sleep tonight, think it through and see how it looks from the other side of the fence? These are really big issues. Although the Bill is still going through ping-pong, I wonder whether Clause 39 can survive and whether the regulation- making power in that clause will ever be exercised.

These are fundamental points and, to be honest, I do not think that the Minister has really grasped the importance of them. I would like to think that he will, and I look forward to further discussions with him before Report. For the time being, however, I beg leave to withdraw the amendment.

United Kingdom Internal Market Bill

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Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020

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United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 135-III Third Marshalled list for Committee - (28 Oct 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Amendment 61 in my name would delete the first reference in the Bill to any part of the offending Part 5. For the purposes of good management, it is far better that instead of addressing that in this group, we wait until we get to Part 5. Amendment 61 was intended to be a paving amendment to the Part 5 debate, so I will leave that until then.
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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I thank everybody who has contributed to what has been, as always in this House, a fascinating debate, ranging far and wide, from cattle droving in the 1700s, through to the immense knowledge of the noble Lord, Lord Liddle, on current EU matters. It is good to see him again to take up cudgels across the Dispatch Box. As he knows, I do not agree with him, but I always enjoy debating these matters. I hope that noble Lords will have patience today. I have quite a lot to say—many points have been raised and I intend to go into a lot of the detail. I apologise if my remarks are a little long.

Amendments 7, 8, 20, 21, 22, 26, 32, 45 and 61, all seek to alter or change the application and scope of mutual recognition and non-discrimination for the internal market and goods. The workings of mutual recognition and non-discrimination as applied in this Bill have been carefully designed to suit the UK’s unique constitutional and legal arrangements. We consulted widely on this, based on the Government’s proposals set out in the White Paper in June.

The noble Baroness, Lady Finlay, wanted to know in detail about the consultation. We published for her benefit, a response in full to the White Paper consultation on 9 September and I would be happy to send her a copy. The consultation demonstrated that UK businesses and industry representatives are overwhelmingly supportive of the measures to prevent discriminating behaviours within our internal market. I will set out the rationale why I cannot accept these amendments. I am happy to explain how mutual recognition and non-discrimination work in greater detail.

We have been clear that the UK will do nothing to diminish its reputation as a leading nation when it comes to setting and expecting high standards of its domestic businesses and international trading partners. I know this is a concern that the noble Baroness, Lady Hayter, has expressed on other Bills that we have discussed in relation to EU exit and is what she seeks to address in Amendment 7, but I contend that this simply will not arise.

Removing imported goods from the mutual recognition principle would mean that those goods, simply because of where they were sourced, could not benefit from the same regulatory treatment as goods produced in the United Kingdom. Even when produced to identical specification and quality as domestic products, this discriminatory impact would put imported goods at a conspicuously unfair disadvantage. Under such a discriminatory approach, we would be likely to be in clear breach of our World Trade Organization commitments to treat imports from other countries no less favourably than similar products produced domestically.

This amendment would also create continued uncertainty for importers. Those businesses whose supply chains rely on overseas sourcing could find themselves at a competitive disadvantage. This amendment would not tackle the issue it seeks to address and would have significant negative consequences for the UK if included.

There was considerable discussion of Amendment 8, tabled by the noble Lord, Lord Rooker, which would ensure that food and animal feedstuffs would not fall within scope of the mutual recognition principle. Like my noble friend Lady Noakes, I was slightly struggling to understand the relevance of his comments about pig semen. I think he asked whether pig semen across the island of Ireland would be affected by Clause 2, but I am happy to confirm for his benefit that pig semen will be subject to the same rules as other goods across the island of Ireland and only when it moves from Northern Ireland to Great Britain will it be subject to any checks. On pigswill, I am happy to confirm for him that the Government will not allow the reinstatement of its use.

This amendment could have serious consequences for the food supply chain, as foods sold in one nation could not be sold in another if there were different regulatory requirements, creating significant barriers to trade within the UK. As I have said, the Government remain committed to maintaining the highest standards in food and feed safety. The UK internal market approach will not change the approach to determining food and feed safety and hygiene policy. I can put at rest the noble Lord’s mind and that of the noble Lord, Lord Purvis: Schedule 1 to the Bill contains an exclusion to the market access principles to continue to enable the UK Government and the devolved Administrations to take appropriate risk-management measures to prevent or reduce the movement of unsafe food or feed from one part of the UK to other parts. I will have more to say about that later.

Turning to Amendment 20 and the consequential Amendment 22, tabled by my noble friend Lady McIntosh and relating to the exclusion of certain existing statutory requirements from the mutual recognition principle, Clause 4 ensures that pre-existing regulatory differences within the UK are excluded from the scope of mutual recognition. This is a forward-looking Bill that seeks to ensure that businesses can continue to enjoy the benefits of our well-integrated internal market after the transition period ends on 31 December. Businesses already live with and have adapted to any regulatory differences that currently exist, so mutual recognition does not need to apply retrospectively. In line with this objective, Clause 4(2)(b) ensures that this exclusion is specifically targeted at those areas in which regulatory differences have previously emerged.

This amendment would widen the exclusion to include any statutory requirement that existed prior to the relevant day set out in the Bill, regardless of whether there had been divergence in that area. However, this is not necessary. Mutual recognition has a practical effect only in areas where requirements differ across the UK, which is why the exclusion is targeted at those areas. Regulatory requirements, which are currently harmonised across the UK, do not need to be specifically excluded as the application of mutual recognition will not make any difference to the status quo. Of course, if the existing requirements excluded by Clause 4 are amended in a way that changes the effect or outcome of the legislation, they would then come within the scope of mutual recognition.

Amendment 21 is consequential on Amendment 6, which we discussed previously as part of a wider discussion on market access principles. It would amend the exclusion of pre-existing requirements from the mutual principle if Amendment 6 is also adopted. My noble friend Lady Bloomfield addressed Amendment 6 yesterday in the fifth group but, in brief, these amendments in combination would enable harmful regulatory divergence within the UK internal market into 2021 and beyond. This could lead to new barriers for businesses trading within the UK, instead of clarity and certainty.

The noble Lord, Lord German, and the noble and learned Lord, Lord Hope, asked about any follow-on emissions trading scheme. This is a non-market framework, so it would not be captured by the market access principles as it does not relate to a good or service.

The noble Lord, Lord Purvis, raised a number of questions about fertilisers. I shall give him a detailed reply. To exclude from the principle of mutual recognition as proposed by the Bill the safeguarding decisions of Administrations in relation to the placing on the market of fertilisers would allow each Administration to ban the sale of a fertiliser or impose conditions on that fertiliser in their jurisdiction in response to a risk to the health and safety of humans, animals, plants and the environment. We think it necessary to retain the current ability for the individual nations to take local circumstances into account and immediately to take a fertiliser deemed unsafe off the market in their territory without the risk of that product finding its way back into that territory via another nation. Without that amendment, it could take some time formally to ban a product through legislation—perhaps a couple of years.

The noble Lord also asked about pesticides. Decisions on which pesticides can be authorised to be marketed and sold in each part of the UK are already within devolved competence. All four Administrations work closely together, supported by HSE, and most decisions can be taken jointly by consensus. However, retaining the ability of each Administration to take its own decision where necessary is important, for example, if merely to consider locally specific factors, such as environmental or farming conditions, which can differ across the UK. This has worked well for many years where there has been occasional divergence between different parts of the UK and has not, so far, caused problems. This amendment therefore maintains the current position.

Amendment 26, tabled by my noble friend Lady McIntosh, seeks an explanation of the meaning of Clause 5(3), which I am happy to give. Clause 5(3) will operate so that any future requirements that fall within the scope of the non-discrimination principle will be of no effect to the extent that they are discriminatory. For the benefit of the lawyers, this does not mean that the requirement is to be treated as if it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effects. This aims to ensure that businesses can continue in their trade and goods can continue to be sold, despite protectionist measures that might treat goods from one part of the UK more favourably than goods from another. As the Bill deals with trade across the whole of the United Kingdom, the intention is that this will apply to all legislation: secondary legislation, primary legislation passed by devolved legislatures and legislation passed by the UK Parliament.

We believe that this does not require further elaboration in the Bill and is clear that only changes to existing legislation that affect the outcome are in scope. The amendment in question could cause confusion as there may be amendments that are considered “significant”, but do not change the outcome or effect of legislation. Fundamentally, however, the drafting in this clause will allow businesses to continue following the same regulations as they have been accustomed to, as our desire is not to disrupt their operations. That flexibility is important, because we want this provision to catch legislation only to the extent that it produces discriminatory effects. If something is not law, it cannot have any effect. As I said, we want to create a presumption that future Acts of Parliament are subject to this rule, which the current drafting allows.

My noble friend Lady McIntosh also asked whether, if the FSA and FSS had different rules, that would impact on the free movement of goods. The principles of mutual recognition and non-discrimination will apply to goods, including food, feed and animal products. This means that a good that can be lawfully sold in one territory can be lawfully sold in the other territories without having to comply with that other territory’s requirements. The only exclusion from this, as I said earlier, is set out in Schedule 1, which provides for exclusion in emergency scenarios where specific criteria are set out.

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Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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The Minister did not explain why services from the Isle of Man to the rest of the United Kingdom will be considered within the United Kingdom internal market, but goods coming from the Isle of Man are outside the single market. There are many service providers from the Isle of Man. In fact, financial services are probably a bigger part of the Isle of Man economy than goods for export. I would be grateful if the Minister could explain this. The Minister did not respond to my point about whether these regulations apply to the services that citizens receive for higher education. This is very important within Scotland.

My point to the Minister, I believe, justifies my argument on the good working relationship across the four nations on fertilisers and pesticides. The Minister referenced the justification for the government amendment about the need to work in emergencies. Paragraph 1 of Schedule 1 already has exclusions from market access principles for threats to human, animal and plant health. Emergencies were already covered. The amendment that the Government brought forward was not on emergencies; I looked at the regulations that it covers, which are in paragraph 9 of Schedule 1 on fertilisers and pesticides. The Bill will allow the Scottish Government, and a Welsh Government or UK Government acting for England, to make a different judgment on the advice they get from the single regulator about the safety of a pesticide for, as the Minister Paul Scully said, “movement and use”.

So, if English farmers, under the authority of the regulations in the Bill, decide to use fertilisers on crops—barley—that are unsafe in the view of the Scottish Government, the Bill will allow the Scottish Government to prevent that barley from being used in Scottish distilleries. The Minister said that the whole purpose of the Bill was to prevent that from arising. So he has managed to undermine the entire intent of his argument at Second Reading, which was that the purpose of this legislation was to prevent a barrier from a different decision being made on safety grounds. If this amendment, which the Government brought forward, allows for different decisions to be made on the safety of pesticides used in different parts of the UK, I hope the Minister will reflect on what he said about the justification for the Bill.

Lord Callanan Portrait Lord Callanan (Con)
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I understand the point the noble Lord is making, but I think we are talking at cross purposes. It would allow provisions on unsafe products, but the provisions would be based on advice from the common regulator—so presumably the authorities in England would draw the same conclusion. It does not allow a Minister to dream up a definition of “unsafe” and implement provisions on that.

On the noble Lord’s first point, if he will forgive me, I will write to him.

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Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con) [V]
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My Lords, I am struggling to understand the Minister’s reply on Amendments 26 and 45. I am particularly concerned about Amendment 26, which is a probing amendment and simply asks for greater clarity, which I do not think we have had. Is he saying that the statutory requirement has no effect? Does he mean that it is valid or not? Is it enforceable? I am trying to avoid a situation where there is any doubt whatever, and court action might be taken. I do not quite understand his answer that the possibility of court action is excluded if, in the view of others, a statutory requirement has effect and could, therefore, be actionable.

Lord Callanan Portrait Lord Callanan (Con)
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No, it does not mean that the requirement is to be treated as though it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effect.

Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, I think I am Baroness Hayter of Confused. I did not understand that last reply. I thank the Minister for attempting to answer the question, though I have to warn him that I think he is in trouble with the boss. I think he admitted that there would be checks at the border between Northern Ireland and Great Britain on pig semen. The boss said, “No checks, no extra paperwork”. I am now hearing noble Lords say, “New checks”. That is not what the Prime Minister said at that reception. He said, “If there’s a piece of paper, send it to me and I’ll throw it away”. I shall make no comment on semen causing particular problems, but it seems that there would be checks on it.

I shall try to be brief because a lot of points have been raised. I thank all noble Lords who have spoken, particularly those who support the line we are taking. I fear that many of these questions flag up the problem that the Bill was drafted without the full involvement and agreement of the devolved authorities. We may not be where we are if those discussions had taken place beforehand. I think it was the noble Lord, Lord German, who talked about parallel tracks between the common framework and this Bill. It loses not only the consensus approach to the common frameworks that we have discussed before, but the flexibility that the noble Lord, Lord Purvis, mentioned. We want to build on this. I hope the Minister will hear some of these questions and see whether he can give a response that ensures clarity for business, as well as for those operating in this area.

The Minister did not answer on universities and I am not sure he answered about the all-Ireland agreement. A lot of other points were raised about animal feedstuffs and pesticides. It would help if some of those dialogues could continue before we get to Report. It is also worth listening to what my noble friend Lord Liddle said. The Government should stand up and say that they support the maintenance of the devolved settlements, and that they recognise and want to keep diversity where it would still enable us to have an internal market. That sort of statement would be helpful.

I am sorry that the noble Baroness, Lady Noakes, is now not allowed to come back at me for what I am going to say. I partly agree with her. We want trade and believe that it is good, but not at any price—not at the price of safety or the environment. This does not mean that we are not in favour of greater trade with all the benefits that it has brought. I also agree with her that, of course, we favour free, and barrier-free, trade. That is why some of us want a deal with the EU, which has no tariffs or checks, and we wanted to stay as close to it as possible. I know it was not her view that we should stay in. I think I once heard her say—I am happy to correct this at the end if I am wrong—that trading on WTO terms would not be the end of the world. Good, the noble Baroness is nodding, so she confirms that she said it. That, of course, would mean a lot of checks and a stop to free trade.

The issues raised in this debate need further consideration. We have to resolve the question that the noble and learned Lord, Lord Hope, asked. Will there be any input by the devolved authorities into importation by, particularly, the English Government? They will need some comfort over that. I beg leave to withdraw the amendment.

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Moved by
9: Clause 3, page 2, line 21, leave out “any” and insert “a particular”
Member’s explanatory statement
This amendment would clarify that the purpose of Clause 3 is to identify what are the relevant requirements that apply to a specific sale of goods (the word “sale” being defined broadly in Clause 14).
Lord Callanan Portrait Lord Callanan (Con)
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I apologise in advance if noble Lords are in for more technical explanations. We will take together the minor technical amendments in my name to Clauses 3 and 4. All involve drafting improvements or clarifying technicalities. None of these amendments results in a change of policy, but they need full and proper scrutiny in this Chamber and noble Lords deserve an explanation of the improvements that they make to the Bill.

First, I turn to Amendment 9. This clarifies Clause 3 by identifying what is a relevant requirement in relation to a specific case where particular goods are sold. Without this amendment, there could be ambiguity as to whether a requirement needs to apply to all sales of all goods to be a relevant requirement. For example, where a business has produced a tin of biscuits in Scotland and seeks to rely on the mutual recognition principle to sell them in England, this amendment makes it clear that the relevant requirements are those that would apply to the sale of the biscuits in England and to the equivalent, hypothetical sale of the biscuits in Scotland, Northern Ireland or Wales. Requirements that apply to other sales of other goods—for example, requirements that apply to the auctioning of a painting—would not be relevant requirements in this context. Without this amendment, there is a risk of legal uncertainty over which requirements are relevant. This could create confusion, costs and inconvenience for businesses.

Amendment 10 provides similar clarification. It emphasises that subsection (2), which defines and therefore enables one to identify a relevant requirement in relation to a particular sale, makes relevant requirements only in relation that sale. Requirements are not relevant in any general way; they are relevant only in relation to the sale in question.

Amendment 18 clarifies that Clause 4(1)(a) refers to a specific sale of goods, rather than a hypothetical sale of goods. It makes clear that we are referring to an actual sale of goods and not to a hypothetical sale. As a result, the amendment removes any potential ambiguity around which existing statutory requirements are excluded from the mutual recognition principle. This amendment also ensures consistency with Clause 3(1), as proposed to be amended by Amendment 9—also in my name. Once again, we are considering requirements which apply specifically to a particular sale—for example, the requirements that would apply to the sale of a tin of biscuits in England, as per my previous example, but not all requirements that might apply to any other sales of goods. This makes clear which statutory requirements might be excluded, if the conditions in Clause 4(2) are met.

Amendment 19 corrects a small drafting error in Clause 4(1)(a). This paragraph refers to “a” part of the United Kingdom when it should refer to “the” part of the UK mentioned in the opening words of the subsection. It removes any ambiguity around which part of the United Kingdom is being referred to in Clause 4(1)(a), so that there can be no doubt that when we are considering English requirements, we are considering how they apply in relation to a sale in England. Without this amendment, there could be confusion over whether we are referring to just those requirements which apply in England or to requirements which could apply in any part of the UK.

Finally in this group, Amendment 23 aligns the language used in Clause 4(2) and 4(5). Both provisions refer to a hypothetical sale on a particular day, rather than to an actual sale. These subsections set out the conditions for when an existing requirement will be excluded from mutual recognition. Both should refer to a hypothetical sale on the relevant day. This amendment clears up the ambiguity by making it clear that both subsections refer to a hypothetical sale, rather than to an actual sale. Aligning the language in this way will make the drafting of this clause clearer and will avoid any confusion over why the wording is different in Clause 4(2) and 4(5) when both should refer to a hypothetical and not to an actual sale.

Taking again the example of the sale of a tin of biscuits, Clause 4(2) and 4(5) refer to the statutory requirements around the sale of biscuits, which would have been enforced in different parts of the UK on the relevant day, which is the day before this Bill comes into force, if the tin of biscuits had been sold on that day. This means that we will always be talking about a hypothetical sale here, and the amendment to Clause 4(5) makes this clear. Without this amendment, it is not clear that Clause 4(5) is referring to a hypothetical sale, which may cause confusion. I beg to move.

Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con) [V]
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My Lords, I am interested to know why the Minister felt that these amendments needed to be moved at this time; what provoked that? Furthermore, who decides—and in what circumstances—what is a hypothetical sale, as opposed to a real sale?

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, I have mainly technical, minor drafting points, which do not require much discussion. The Minister was consumed during his speech because of the hypothetical tin of biscuits that he brought into play. I am so glad that we do not have details of what pig semen is carried in. I much prefer us sticking with the tin of biscuits as our main metaphor in these issues.

Like the noble Baroness, Lady McIntosh, I wonder why these amendments are being tabled now. After all, the Bill has been through the other place and been republished. Only now are we getting evidence of “scrubbing the text” to ensure that the sorts of issues raised in this group of amendments will not get into the final version of the Bill. It is a minor criticism of a very minor issue, and I am happy to await the answers to the questions raised by the noble Lord, Lord Purvis, which would bear substantial response and will need to be dealt with at the appropriate time.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, I apologise to noble Lords for hesitating in my answer earlier. There is a danger of this “tin of biscuits” example assuming the same significance that the maiden aunts of the noble Lord, Lord Lisvane, did, during the EU withdrawal Bills. I see smiles from noble Lords who were involved in those debates. However, I am not sure that we should pursue the “pig semen” argument of the noble Lord, Lord Stevenson.

To answer my noble friend Lady McIntosh, these are technical changes relating to drafting errors that became apparent in further studying the text following amendments tabled by noble Lords. Following further examination by government lawyers, the Bill was drafted fairly speedily over the summer. Our intention was to avoid government amendments, but we wanted to hear the replies to the consultation and the White Paper. They are technical and legal clarifications that change none of the policy intent.

I assure the noble Lord, Lord Purvis, that the minimum unit alcohol pricing policy is unaffected, because it is an existing measure that is excluded, and because it is specifically excluded in addition to that, via various clauses. I will write to reassure him of that. Regarding his points about gin and vodka, I am not an expert on the Scottish measure, but I think it affects the retail price of the sale and not wholesale prices, and therefore the product would need to be sold at a different price, as specified in the Scottish measure. However, I consulted officials when we first debated this legislation and was assured that the Scottish measure would be unaffected by this legislation. I am happy to write reassuring the noble Lord on that point.

Baroness Fookes Portrait The Deputy Chairman of Committees (Baroness Fookes) (Con)
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I have received a request from the noble Baroness, Lady McIntosh of Pickering, to speak after the Minister. My apologies; I gather that is not the case.

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Moved by
10: Clause 3, page 2, line 28, after first “requirement” insert “in relation to the sale”
Member’s explanatory statement
This amendment would clarify that a statutory requirement that meets the conditions in paragraphs (a) and (b) of Clause 3(2) is a relevant requirement in relation to the sale mentioned in Clause 3(1).
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Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, there is little to add to what my noble friend Lady Andrews and other members of the hard-working, thorough and thoughtful DPRRC have said, along with the noble Lord, Lord Fox, and others who have spoken in the debate. However, I would remind the noble Lord, Lord Thomas, whose party has been in government more recently than we have, that I do not recall any reluctance on the part of the coalition Government to reach for secondary powers when it suited them—but perhaps his memory is rather shorter than mine.

I should say to the Minister that these amendments are pretty much bound to be accepted by the House on Report. That, of course, will leave the Government having to try to defend in the House of Commons in more detail than they have had to thus far why they should gift themselves the most remarkable and far-reaching powers, none of which, as has been said, have they sought to justify by purpose, urgency or anything else. Rather than repeat what the 24th report sets out and what has just been set out so eloquently, I urge the Minister to listen to the wise words and, either after discussion or of his own accord, take these unnecessary and worrying powers out of the Bill.

My noble friend Lord Liddle touched on the powers in Part 5. Obviously we will take those out, but of course the Government might try to put them back in again. We should remember that this group of amendments covers regulations that would, if they manage to keep Part 5 in or return it, be made in some areas of Part 5. These regulations are really serious, due to the current Clause 47(2)(a), which, as everyone will know, gives the status of primary legislation for the purposes of the Human Rights Act to secondary legislation. Inexplicably and extraordinarily, those pieces of secondary legislation would therefore not be able to be struck down if they breached convention rights, rather they would have thrown around them the protective ring that is normally used only for primary legislation. But those measures are regulations that will not have been through the legislative process. They would be introduced as secondary legislation by regulation, but would suddenly be preserved as if having been given the status of primary legislation. That is set out in Clause 47(2)(a)—I hope I have got that right; I have my learned friend next to me, in case I have got it wrong.

Needless to say, the Joint Committee on Human Rights had rather a lot to say about this constitutionally unacceptable ruse. Its members have tabled an appropriate amendment to remove it when we get to Part 5, and quite right too. The Government seem to want to legislate by regulation—unchallengeable in court, therefore —giving it primary status that goes even further than the other Henry VIII powers which were considered by the DPRRC. I have a feeling that the committee met before the insertion of this clause in the Commons—I think I am getting a nod from behind me—which is presumably why the Delegated Powers Committee did not discuss it.

I add a further comment that goes beyond the Bill but is a reflection of what has already been mentioned. I have spoken in the House previously about the book, How Democracies Die, which lists institutional forbearance —along with the rule of law, respect for the opposition and a free press—as a fourth vital element of what the authors call quadrilles, which go beyond democratic elections, on how to have a robust and fully functioning democracy. Institutional forbearance is an interesting term and is defined in the book as,

“the action of restraining from exercising a legal right”,

thereby perhaps avoiding actions which, while within the law, violate its spirit. It is what my former supervisor, the noble Lord, Lord Hennessy, would call the “good chaps” theory of government. I agree that regulation-making powers can be donated to Ministers but the purpose of that was to enable small adjustments to the policy of an Act to be finalised or tweaked without primary legislation. It was not meant to gift big policy decisions—especially not of the sort included in the Bill, which I heard today was hurriedly written over the summer—to the Government with effectively no parliamentary scrutiny or agreement.

Therefore, like my noble friend Lady Andrews, and the noble Lord, Lord Fox—whose extremely useful quote from the noble and learned Lord, Lord Judge, I have not heard before—I am concerned about the extensive, unnecessary and quite unjustified use of Henry VIII powers, not simply in this Bill but in others. It is a worrying pattern that this House has a duty to curtail. I hope that this is the last occasion on which we have to remind Ministers that they should carry out the primary laws as passed by Parliament, not take to themselves powers to make their own laws.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, I have a sense of déjà vu about this debate. The noble Lord, Lord Liddle, will well remember our debates on the EU (Withdrawal) Bill. These amendments relate to delegated powers included in Parts 1, 2 and 5 of this Bill. I should probably decline the kind opportunity afforded to me by the noble Lord, Lord Thomas, to comment on the parentage of Henry VIII, apart from saying that the noble Baroness, Lady Bloomfield, who is an expert on all these matters, tells me that his parents were Henry VII and Elizabeth of York—officially, at least.

I should say in answer to the noble and learned Lord, Lord Hope of Craighead, and his comments on the Sewel convention that the Government are fully committed to that convention and its associated practices for seeking consent. These powers are purely there to ensure that the legislation works properly and is future proof. There is no intention whatever to use the powers to avoid Sewel processes.

I should like to take this chance to emphasise the importance of these powers for the ongoing dynamism of our internal market, and to emphasise that the Government will not take lightly their responsibility in administering these powers. I am of course listening carefully to what your Lordships say but it is important for me to explain how we intend to use these powers.

The Bill aims to ensure a smooth transition for businesses as they are no longer subject to EU constraints. However, we recognise that this is an ambitious new system and the Government want to make sure that it works as well as possible for businesses and for devolved Administrations. As the system embeds in the functioning of law and trade, we will of course be monitoring this. We will speak to stakeholders and devolved Administrations to ensure that it works as well as possible within our constitutional framework. Where it does not, the Government need to be able to make necessary amendments to the system for the benefit of all parts of the UK. In line with normal arrangements for secondary legislation covering devolved matters, we will of course engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, I join the noble Lord, Lord Thomas of Gresford, in thanking the Scottish Law Commission for its contribution to this debate; it keeps an eagle eye on issues in front of your Lordships’ House and from time to time delivers material that is very useful to us as we go through our duties.

As the noble Baroness, Lady McIntosh, said, these are probing amendments. They are about the possible uses of super-affirmative procedures and, as she says, relate to issues in the Bill that might well qualify under her heading for a higher degree of scrutiny.

The noble Lord, Lord Thomas, gave us a useful tour d’horizon of the available ways of doing super-affirmative. I agree with him that there is a case to be made here for looking at them in more detail to make sure that they are picked up and looked at regarding their best purpose, but that perhaps is not for today; there are bigger issues here and they should be looked at, but not in this Bill.

My noble friend Lord Judd asked whether the Government really welcome scrutiny or are simply pursuing their normal process—which seems almost inevitable for any Government—to try to obtain absolute control over the legislation they are bringing forward. I suspect the answer to that question is not to be found in providing for better scrutiny. This is a Bill with deeper problems. I do not think that these proposals, although they have their merits, are the right way forward in trying to unscramble those deeper difficulties. I look forward to hearing the Minister respond.

Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
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My Lords, I thank my noble friend for tabling her amendments, which relate, as she explained to the Committee, to the implementation of a super-affirmative resolution procedure. This debate is something of a coda to the previous group. It teases at the questions that many of your Lordships raised there and to which my noble friend Lord Callanan responded in some detail, so, if the House will forgive me, I will not repeat those general arguments in relation to these matters, although I repeat that the Government believe that these powers are important for our internal market. As my noble friend Lord Naseby said, we are dealing with trade matters. I repeat that the Government will not take lightly our responsibility in administering these powers.

I thank all those who took part in this debate for the interesting speeches we heard. On a personal note, I always welcome seeing the noble Lord, Lord Judd. I agree with his expression of admiration for noble Lords and Baronesses on the Front Benches opposite for their work on this Bill. Perhaps he will allow me to extend that sentiment to my noble friends Lord Callanan, Lady Scott and Lady Bloomfield and my colleagues.

Pleasantries apart, of course we acknowledge that the Bill gives the Secretary of State the ability to amend the list of legitimate aims, relevant requirements and schedule exclusions through a draft affirmative statutory instrument, with just one time-limited made-affirmative power, which relates to the services exclusions in Clause 17(4). We are fully committed to ensuring that the use of these powers is subject to effective oversight and consultation. That is why any use of the power would require an affirmative regulation to be passed in both Houses of Parliament. This will ensure that Parliament would be able to scrutinise and vote on any changes.

Turning to the substance of my noble friend’s amendments, if we were to accept Amendments 14, 29, 40, 76, 77, 101, 133 and 176, to which my noble friend spoke in this group and which call for the super-affirmative resolution procedure, it would cause unnecessary delay when a change was urgently needed. That point was very forcefully made by my noble friend Lord Naseby in a compelling speech made from the standpoint of his immense experience in chairing the proceedings of the other place.

Although your Lordships’ Delegated Powers Committee had many observations on this legislation, it did not propose the super-affirmative resolution procedure. I repeat: there is a risk of undue delay in a situation that may arise where it appears necessary to act swiftly to prevent undesirable outcomes. My noble friend Lord Callanan gave a number of examples on the previous group. The Government may need to respond quickly and effectively to maintain the status quo after the transition period has ended.

We believe that the draft affirmative resolution procedure—noting that the made-affirmative power is time-limited—offers sufficient parliamentary scrutiny while enabling the Government to act quickly. I therefore ask my noble friend to withdraw the amendment. While I think her amendments attracted the interest of the Committee, and I am grateful to her for bringing them forward, I think it would be fair to say they did not carry the support of the Committee.

As my noble friend has acknowledged, Amendment 24 is consequential so I will not address it in detail. Amendment 25 seeks to probe the Government’s understanding of what is meant by “substantive change” in Clause 4. I can tell my noble friend that it means that any changes that re-enact regulation in a way that changes its outcome count as substantive. Where existing legislation receives technical or minor amendments that do not alter its substance, that does not count as a substantive change.

I hope these responses address the concerns of my noble friend and therefore ask her to withdraw her amendment.

Baroness Morris of Bolton Portrait The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
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My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I am grateful for the Minister’s comments on Amendment 25. It was a question linked to the previous group that the noble Lord, Lord Callanan, did not respond to, so I am very grateful that he did.

The Minister talked about how “substantive change” is now defined. We are now in the realm of what the Minister said is a Pepper v Hart moment because what is said on the record at the Dispatch Box is very important, and these measures require a different outcome. The policy outcome intentions of many of these measures might remain the same, but some elements would be different. If the Minister is saying—on minimum unit pricing, for example, or on environmental or public health considerations—that if the intended outcome of the re-enacted or updated requirement remains the same, would that continue to be exempt? That is important because, in both the legislation and the Explanatory Memorandum, that is not so defined. If minimum unit pricing changes the level of the price, or if tuition fees continue but their level changes, if the policy intent is the same, the exemption will carry on—is that the correct understanding?

Lord True Portrait Lord True (Con)
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My Lords, I note and hear what the noble Lord has said, but I think he would allow me not to enter into speculative discussions. I have put to the Committee a response to a question—a response provided to me to advise the Committee. As for its application, that is a matter that would be speculative and could be considered further. I will stand by the words that I put before the Committee.

Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con) [V]
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I thank all noble Lords who have spoken in this debate. I was grateful for the opportunity to probe the extent to which this procedure of super-affirmative resolution may be more appropriate.

My noble friend Lord Naseby might not think that this is a matter of life and death, but if you are dealing with perishable goods—particularly animals and their movement over what will be internal borders—that might be the case. I part company with my noble friend on the EU-Japan agreement; it actually does not go that far. My understanding is that what was heralded as a bigger market for cheese, which will be very welcome, relies on the EU allowing us to use what is left of its quota that it does not wish to use. It is the leftovers—the crumbs under the table. It could be very helpful to our cheese producers, but it is not quite as straightforward as one might first think.

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I turn finally to Amendment 48, which seeks to amend the regulatory powers in Clause 10 to amend Schedule 1. It covers similar ground, requiring the Government to seek the consent of the devolved authorities before any changes to the schedule of exclusions from market access principles. These currently include unsafe foods, for example—although sadly not public health. The key issue again is the need for any changes to this schedule to be made only after consultation, and hopefully agreement, with the devolved authorities. The issue is dealt with in more detail in a subsequent group. Here, as my noble friend Lord Liddle and others have said, we are talking about moving forward within our devolved system, not undermining it and not taking powers back to London. That is why the amendments in this group are so important.
Lord True Portrait Lord True (Con)
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My Lords, I am grateful to all those who have spoken in what has been a thoughtful debate absolutely in the proper traditions of your Lordships’ House, both in the spirit of inquiry and in the main—I will come to that point in a minute—in manner. I am of course sorry that the noble Baroness, Lady Finlay, was unable to be here, but I was delighted to hear the noble Lord, Lord German, move the amendment so ably. I was also glad to learn that he is an assiduous reader of the words of my right honourable friend Jacob Rees-Mogg. I can tell him that that is a very improving activity and I heartily commend it to him. I would say in response to his point that this legislation has collective agreement and therefore it is subscribed to by all members of the Government.

Having mentioned the noble Baroness, Lady Finlay, and having in mind the remarks of the noble Lord, Lord Wigley, I would like to thank the Welsh Government, who had an involvement in some of these amendments, for what has been their positive engagement on this Bill to date at both ministerial and official levels. I have had the privilege of being present at discussions on this matter.

When I talked about taking exception, I was thinking about tone. People have asked what the Government’s intention is and what the exceptional circumstances are. Like it or not, the exceptional circumstances are that, after a lengthy period of being a member of the European Union, which effectively controlled our internal market, the British people have elected to leave the European Union and the British Government—and British Governments collectively—have a responsibility to provide for successor arrangements. I do not believe that this should be the occasion for a great set of conspiracy theories. I do not agree with the noble Lord, Lord Liddle, that the Government are making a meal of the system, and I reject what he said about the Government abandoning the frameworks. We have discussed that at length in this Chamber and I have set out the continuing commitment of this Government to the framework process.

So, as we discuss this, it is important that the process of respect goes all ways, and this Government have a profound respect for all the peoples of these islands and all those involved at every level in the difficult process of governing effectively and responsibly the people they have the honour to represent. The Government seek to go forward co-operatively with the devolved Administrations and all other people in our democracy. I do not believe—with great respect to my noble friend Lord Cormack—that it is helpful to use words such as “domination” as an aspiration of the Government, and nor is it helpful for the noble Baroness, Lady Bennett, to talk of dictatorship. That is not the way in which this Government think, behave or intend to go forward. They hope to go forward with respect and co-operation.

The Bill attempts to ensure a smooth transition for businesses, as they are no longer subject to EU constraints, and to maximise certainty through the Covid recovery and the end of the transition period. It does not remove powers from the devolved Administrations. What the Bill does do is ensure that no new barriers to intra-UK internal trade will be created following the end of the transition period, and that companies from all parts of the United Kingdom will be able to trade seamlessly with one another. That is an objective that everybody in this House genuinely shares. I agree with what the noble Lord, Lord Purvis of Tweed, said: I believe that everybody in this Chamber—or, at least, almost everybody—is committed to maintaining the union of the United Kingdom. We intend, and obviously hope, to perpetuate and protect the system where companies from all parts of the United Kingdom are able to trade with each other.

Following the end of the transition period, devolved Administrations will see an increase in their powers in multiple devolved policy areas, as the role of the EU institutions falls away. They will include areas where the EU has previously set regulatory standards. The Bill seeks to strike a balance between respecting devolution and ensuring that UK companies can continue to trade unhindered in every part of the UK. Hearing some of the things that have been said, one would not think that it was this Conservative Administration who, as recently as 2017, extended so profoundly the role of the Welsh Senedd. It is vital that legislation introduced by the Bill should act across the whole of the UK, providing all of our businesses and consumers with the same degree of certainty. That is important in whatever corner of the four parts of our kingdom businesses and consumers live, just as there must be the same protection from discrimination and the same opportunities for prosperity and well-being. We owe that to every corner of this kingdom.

Yes, the driving principle of the Bill—maintenance of the internal market—is captured by Amendment 109, in the name of the my noble and learned friend Lord Mackay of Clashfern. The purpose of the Bill is as he set it out, but I do not see how it could be used for any other purpose, and I do not believe that to restate it on the face of the Bill could be anything other than potentially confusing. But I do take the spirit and the letter of what my noble and learned friend said: this is the purpose of the Bill, and it certainly is not to be set in the context of conspiracy theory. It provides for a new system that is both ambitious and necessary and, as I have said, it is a pivotal moment for the United Kingdom to develop its own bespoke regulatory system and we must make sure that this offers benefits to businesses in every part of the United Kingdom and to the devolved Administrations.

The noble and learned Lord, Lord Hope of Craighead, made a typically thoughtful opening speech. I hope that I misheard him when he said that he regretted the provisions in the Bill as a whole; I believe he was referring to the nature of the regulatory powers. In his remarks, he put forward some ideas that obviously—as my noble friend Lord Callanan said in an earlier debate—we will read carefully.

I can answer directly on the Sewel convention, about which the noble and learned Lord asked a second question. It was addressed earlier by my noble friend Lord Callanan but, for those who were not here, I repeat that the United Kingdom Government continue to demonstrate respect for and commitment to the convention. As such, they have sought the consent of each devolved legislature for the Bill through the established practices and procedures.

However, the convention envisages situations whereby the UK Parliament may need to legislate without consent; the noble Lord, Lord Purvis of Tweed, referred to such a situation. The Government have continued to hold positive discussions with the Welsh Government and the Northern Ireland Executive at both official and ministerial level. The door remains open to the Scottish Government, should they wish to re-engage on internal market matters. It is regrettable that the Scottish Government walked away from discussions on the internal market in March 2019; we urge them to return to the table.

We consulted extensively on the UK internal market White Paper, and received more than 300 responses and overwhelming support from businesses and industry to maintain the status quo and avoid new trade barriers emerging. The consultative nature of that work does not end there. I understand the undertone of what Members have sought in these amendments. We will of course monitor the implementation of the provisions in the Bill and speak to stakeholders and the devolved Administrations to ensure that it works as well as possible within our constitutional setting. The system requires effective and clear governance to provide the necessary certainty for business. Where the system is not working, the Government need to be able to act quickly and effectively to fine-tune the system for the benefit of everyone. That matter was discussed earlier today.

It is suggested by your Lordships that some of the provisions in the Bill should be subject to the prior consent of the devolved Administrations. Amendments 15, 16, 30, 41, 42, 48, 49, 75A and 100A would require this, meaning that, as a pre-condition, Ministers from Scotland, Wales and Northern Ireland would all have to agree with any change before it could be given effect. A number of noble Lords alluded to difficulties that might arise in certain circumstances. Clearly, such a provision could undermine the Government’s ability to act rapidly and decisively to make any changes necessary to reflect the interests of all parts of the United Kingdom, although noble Lords will, I know, have different views on the likelihood of that.

However, there is also a matter of principle at stake: attaching a requirement to obtain consent from the devolved Administrations would undermine the responsibility of Parliament with regard to the internal market. My noble and learned friend Lord Mackay of Clashfern referred in his excellent and thoughtful speech to the importance of the central role of Parliament. The Government believe that this is a fundamental issue. There may at times be a need to legislate effectively for the whole of the UK and only Parliament is capable of doing that. It is a responsibility that we take seriously; we should not resile from or compromise it in any way.

We are fully committed to ensuring that the use of the powers in the Bill are subject to effective oversight and consultation. First, any use of the powers would require an affirmative regulation to be passed in Parliament. This will ensure that MPs from all parts of the UK can scrutinise and vote on any changes.

Secondly, consultation with colleagues in the devolved Administrations is required for any change to the relevant requirements in Clause 3. It is true that a legislative consultation requirement would not be appropriate for the powers relating to exclusions from the market access principles or the list of legitimate aims for non-discrimination. In this case, the Government may need to make a swift decision in the interests of all parts of the United Kingdom, should there be an emergency or an unforeseen issue in future. In these instances, there may be no time to have a consultation period to seek consent. However, for all powers, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.

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Moved by
18: Clause 4, page 3, line 38, after first “a” insert “particular”
Member’s explanatory statement
This amendment would clarify that Clause 4(1)(a) relates to a specific sale of goods (the word “sale” being defined broadly in Clause 14). This is for consistency with Clause 3(1) as proposed to be amended by my amendment to Clause 3 at page 2, line 21.
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Moved by
23: Clause 4, page 4, line 12, leave out from “have” to “place” and insert “had the same effect in relation to the sale (if it had taken”
Member’s explanatory statement
This amendment would bring the wording of Clause 4(5) into line with Clause 4(2).
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Lord Callanan Portrait Lord Callanan (Con)
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I thank everyone who has spoken in what has been another excellent debate. Most of the points have been valid. I will disagree with many of them but noble Lords made their points well.

Before I start, the noble Baroness, Lady Jones of Moulsecoomb, knows that I have tremendous respect for her: we do not often agree, but I have tremendous respect for her views. However, talking about an “extremist ideology” and “hypercapitalism”—whatever hypercapitalism is—does not aid her cause; I would prefer that noble Lords address the issues in a better and more constructive manner.

The scope of the market access principles and the areas of regulation included in Schedule 1 have been carefully designed to avoid unnecessary barriers within the UK’s internal market while ensuring that the devolved Administrations and the UK Government can act to preserve the proper functioning of certain policy areas. This is where I part company with the noble Lord, Lord Fox, because when he talks about the principle of uniformity in an internal market, that is, of course, the EU system, and I do not recall the Liberal Democrats having much of a problem with that in years past. The system of mutual recognition does allow diversity, but while not discriminating against other countries’ goods. The principle of mutual recognition and market access principles allow diversity of policy. The EU system, of which the Liberal Democrats were previously particularly fond—as far as I am concerned—does not because you have common standards and common principles. I understand the argument about the so-called race to the bottom, et cetera, but that is the system that the Liberal Democrats happily signed up to and defended loyally for many years—indeed, it is still their policy that we should rejoin the EU and assume a further application of common principles. I do not agree with it, but it is a view.

I am listening carefully to what many noble Lords are saying this evening, but it is important, so I will take the time to explain why we have taken the approach we have to the application of the market access principles and the exclusions from these principles. Amendments 35, 36, 37, 39A and 95 seek to alter the list of legitimate aims for the disapplication of indirect discrimination against goods and services. The current list of legitimate aims for indirect discrimination against goods contains

“the protection of the life or health of humans, animals or plants”,

which will, of course, align in many cases with the protection of the environment. It also contains

“the protection of public safety or security.”

I agree with my noble friend Lady Noakes that expanding the list of legitimate aims beyond the current list would increase the grounds on which goods from one part of the UK could face discrimination in another—maybe in small, incremental steps, but with each addition steadily eroding the benefits that we all enjoy of the UK internal market. Expanding the list would also make discrimination easier to create and implement within the internal market, which would contradict our policy objectives.

I am of course aware of the comparisons that have been made to the EU system and its list of legitimate aims. The UKIM Bill and non-discrimination principle have been designed to take account of the UK’s unique circumstances, reflecting that our market consists of four highly integrated, highly aligned parts. Conversely, EU provisions deal with 27 countries, all with diverse histories, cultures and competing market priorities. It is therefore right that the list of legitimate aims in the Bill is more narrowly focused. Should a need to amend the list be identified, the Bill allows for the Secretary of State to add, vary or remove additional legitimate aims.

Let me deal with the points raised about legitimate aims by my noble friend Lord Young and the noble Lord, Lord Faulkner, as well as, on a number of occasions, the noble Lord, Lord Purvis, with regard to minimum alcohol unit pricing. I reiterate that policies such as minimum alcohol unit pricing and other innovative pricing policies are not covered by mutual recognition, unless they result in disguised prohibition. It would also be possible to enforce them regardless of what is on the list of legitimate aims or indirectly discriminatory measures, as long as they are non-discriminatory.

The noble Baroness, Lady Randerson, mentioned air guns. All the existing requirements will be out of scope—as I have said, the Bill is forward looking—unless they are amended significantly. Other than that, the air gun restrictions would have to create a significant adverse market effect for indirect discrimination to apply. That is before any consideration of whether that meets a legitimate aim. On her point about unfettered access for Northern Ireland goods, this is an unequivocal commitment from the Government precisely to take account of the possibility of divergence. It precludes qualifying Northern Ireland goods from being subject to new checks and controls and it protects their access to the whole of the UK market, no matter what the legislative regime is in Great Britain.

Amendment 39A is a more nuanced version of Amendment 38. It aims to limit the Secretary of State’s regulation-making powers to only add or broaden a legitimate aim—the Secretary of State would not be able to vary or remove a legitimate aim. Again, I appreciate the nuance of the amendment, but I must emphasise the importance, as we see it, of ensuring that the Government have the ability to adapt and improve the list of legitimate aims to address any challenges that arise—for example, during the implementation phase. We will of course listen attentively to businesses and to consumer stakeholders and may employ the powers that the amendment seeks to remove to ensure the UK internal market’s continued smooth functioning. To clarify another matter about which some have asked, Her Majesty’s Government and the devolved Administrations are not constrained by the rules against indirect discrimination when they need to take reasonable action to protect the life or health of humans, animals or plants, or to protect public safety or security.

Amendment 95 has a dual purpose. It seeks to remove the list of legitimate aims for indirect discrimination against services in Clause 20 and, as such, it would also remove the Secretary of State’s ability to amend that list. The list of legitimate aims covers a limited range of necessary objectives for regulators, which would justify a requirement that may have a discriminatory effect. The legitimate aims are the protection of the life or health of humans, animals or plants, the protection of public safety or security and the efficient administration of justice.

The inclusion of the list of legitimate aims is in our view vital, as it clarifies whether a requirement should be considered indirectly discriminatory and thus whether it is justified to put an affected service provider at a disadvantage compared to a similar provider from another part of the United Kingdom. To allow the flexibility to adapt to potential changes in circumstance—for example, in relation to future types of services regulation—a power for the Secretary of State to add, vary or remove additional legitimate aims is crucial and has therefore been included in the Bill.

I turn now to Amendments 50, 51, 52, 52A and 56, which seek to add in new clauses before and after Clause 10 of the Bill. The proposed new clauses would introduce a new set of conditions that would need to be met in order for an exclusion to be applied. Exclusions have been tightly defined to areas where the market access principles would adversely affect, or prevent the proper functioning of, the UK internal market. For example, we have made it possible for authorities to continue to consider local environmental conditions when authorising a chemical for use in a particular part of the UK.

Turning to Amendment 52, the protection of the environment and tackling climate change are vitally important, and something that the Government are, of course, already committed to. The UK leads the world in environmental standards and tackling climate change. We were the first major economy in the world to set a legally binding target to achieve net-zero greenhouse gas emissions from across the economy by 2050. The EU is only just now catching up with us. We have also been quick to take action against single-use plastic, with our ban on the supply of plastic straws, drinks stirrers and cotton buds having come into force on 1 October this year.

Moving on to Amendment 52A, broadening exclusions from market access principles could result in significant challenges for the UK’s internal market. These are intentionally narrowly drafted to ensure that there are no unnecessary trade barriers that would ultimately increase costs to businesses and consumers while reducing choice. These amendments also do not take into consideration the impact any exclusions might have on unfettered access and Northern Ireland’s place in the UK’s internal market.

Amendments 33 and 34 are both consequential on Amendment 50, which I addressed above. Amendments 55 and 56 are consequential on Amendment 50 as well. Taken together, these amendments would replace the existing schedule of exclusions with a significantly wider exclusion process. The proposed process is not sufficiently targeted and would increase the potential for trade barriers to emerge. For these reasons, I ask noble Lords not to press their amendments.

Amendment 47A limits the Secretary of State’s regulation-making powers to only add to or broaden the exclusions in Schedule 1. The Secretary of State would not be able to vary the meaning of the exclusions in Schedule 1, nor to remove the exclusions entirely under the amendment. This might make it impossible for the Government to respond to business and wider stakeholder feedback and to act rapidly to adjust the list of exclusions if implementation shows the need for a review. While we are committed to retaining this power in the Bill, we are also fully committed to ensuring that the use of this power is subject to effective oversight and scrutiny.

First, any use of the power would, of course, require an affirmative regulation to be made in Parliament. This would ensure that MPs from all parts of the UK would be able to scrutinise and vote on any changes, along with Members of this House. Secondly, in line with normal arrangements for secondary legislation covering devolved matters, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This is a system that has worked well for 20 years and continues to do so. I hope, therefore, that noble Lords will agree that it is not appropriate for us to accept that amendment.

Turning to Amendment 54, the proposed new schedule is related to the new clause in Amendment 6, to which I responded on Monday. These amendments would, in combination, prevent the market access principles from applying in time at the end of the transition period. The lengthy process they put in place before the principles can apply would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Furthermore, they would limit the areas that the market access principles could apply to. This would again unduly constrain the scope of the principles and fail to fully protect the internal market.

Amendment 57 removes the requirement that a measure meets all the conditions set out in paragraph 2 of Schedule 1 to be excluded from the mutual recognition principle. The conditions in paragraph 2 of Schedule 1 relate to the exclusion of certain food and feed measures from the mutual recognition principle, where this is required to address a serious threat to the health of humans or animals. A measure will be excluded from the mutual recognition principle if all the conditions in paragraph 2 are met. These conditions were designed to be cumulative and work as a whole, and in our view would not be effective individually. The fourth condition, for example, relates to the responsible Administration providing a risk assessment of the threat addressed by the measure in question, which is essential in situations relating to protecting human, animal and plant health, but is not a stand-alone condition for any exclusion. As this amendment weakens the ability of the Bill to ensure that we can address a serious threat to the health of humans or animals, I hope that noble Lords will agree not to move it.

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Lord Fox Portrait Lord Fox (LD)
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I sometimes wonder whether the Minister sustains himself through the long periods of Committee by imagining himself throwing off the yoke of hideous EU conformity. In fact, nothing could be further from the truth. How does the noble Lord explain all the examples of diversity across the four nations of the United Kingdom if there is this conformity? How can his comment that the market has worked very well for 20 years stand up, if this conformity was so bad? Indeed, the 2020 assessment by the Government of the frameworks says that they will maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as afforded by the current EU rules. The Government clearly recognise the flexibility in the current EU rules.

I commend the Minister for getting through that lengthy statement without once mentioning the words “common frameworks”. There is still no explanation of how the common frameworks inform the Government’s view today of the internal market. Will he please answer that question?

Lord Callanan Portrait Lord Callanan (Con)
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I thought my comments might provoke a reaction from the noble Lord. Of course, there are EU common standards in many areas as well as EU minimum standards in many areas, and it is possible for Administrations to go further than those minimum standards in many areas, as he will know from his knowledge of EU affairs.

I have said a number of times that we are committed to the work on frameworks and will take it forward, but we were looking for frameworks in something like 38 different areas. So far, we have managed to agree frameworks in two of them. In terms of the frameworks that have been approved by the ministerial committee, I think those numbers are correct; I will write to the noble Lord if they are not. We are committed to taking forward that work on common frameworks, but we believe that this legislation provides an underpinning to that work. We do not believe that they are mutually exclusive; indeed, we think that they complement each other.

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For goods, it simply states “re-enacts without substantive change”. For services, it says “re-enacts or replicates”. Does it simply mean that it is a re-enactment? I do not know what “replicates” means as far as this is concerned. What is a replication of a regulatory requirement that is different from a re-enactment? I would be grateful if the Minister could respond to those points?
Lord Callanan Portrait Lord Callanan (Con)
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It may be helpful to the noble Lord, Lord Purvis, who I know is interested, if I return to a question he asked on the previous group—the vexed question of coal and the English-Welsh border. Let me build on the answer given by my noble friend Lady Bloomfield. Under mutual recognition, the use of coal could be banned regardless of where it is bought. The sale cannot be stopped simply because the use is not permitted. The use would still not be permitted in England, even if the coal is bought in Wales, or if it is legal to use it there. It is the distinction between sale and use that my noble friend referred to. I thought the noble Lord would like early clarification of that.

Amendments 68, 69, 70, 71, 78, 81, 84, 89, 92, 96 and 102 seek to alter the application and scope of both the exclusions and non-discrimination rules for the internal market in services. Several of these amendments centre on the application of the services rules and the non-discrimination principle. This non-discrimination rule is a fundamental safeguard for businesses, ensuring that there is equal opportunity for companies trading in the UK, regardless of where in the UK the business is based. I will address the amendments in related groups, and I am happy to explain how the services rules work, and the list of exclusions, in greater detail.

I thank the noble Baroness, Lady Hayter, for tabling Amendments 68 and 96 on consumer protection. I hope to be able to persuade her that they are unnecessary. As I set out on Monday, the Government are committed to maintaining and protecting the highest consumer standards across the UK. This legislation will be to the benefit and protection of the country’s consumers. Without an updated, coherent market structure, UK services trade could be significantly and detrimentally affected. Future complexities could arise, and costs could then be passed on to consumers through an increase in prices or a decrease in choice.

Amendments 69, 71 and 78 would provide that Part 2 applies only to services specified in regulations. We believe that these amendments are contrary to the aims of the Bill, because this is the opposite to the current approach, which is that mutual recognition and non-discrimination applies to all services except those specified in the schedule. Further, the amendments set restrictive consultation and reporting conditions on a Secretary of State wishing to make those regulations, and a requirement for devolved Administration consent to regulations extending the list of exclusions in Schedule 2. My noble friend Lord True spoke about this issue earlier today in the group on the involvement of the devolved Administrations.

Clause 17 currently aligns with the wider aims of the Bill—to allow businesses and people to trade as they do now, without facing additional barriers based on which nation they are in. These amendments run contrary to those aims. They would make the raising of barriers to service provision the default position, by not applying mutual recognition and non-discrimination principles in the Bill to any services unless specified. The reporting and consultation requirements the amendments place on specifying regulations also mean that bringing services into scope of the rules of Part 2 of the Bill, including all those to which the principles of mutual recognition and non-discrimination apply under retained EU law, would be both difficult and time-consuming. This would, in turn, cause disruption to businesses seeking to provide their services across the whole United Kingdom.

Overall, these amendments could raise barriers to service provision across the UK where even the current system does not, and would seriously hinder any attempts to develop a co-ordinated and focused response to the evolution of services in the future. Therefore, while I recognise the spirit in which these amendments were tabled, I am unable to accept them. However, to answer the questions asked by the noble Baroness, Lady Hayter, and my noble friend Lady Neville-Rolfe, on financial and legal services, and to allay their specific concerns, I can reassure them that legal services are excluded from the mutual recognition principles, and financial services are excluded from Part 2 entirely.

As my noble friend Lady McIntosh makes clear in her explanatory statements accompanying Amendments 70, 81, 84 and 92, their primary purpose is to probe the drafting of the Bill. On Amendment 70, the intention of Clause 16(5)(c) is to restrict the application of Part 2 only to new requirements that take effect after Part 2 itself does. This is because the Bill is intended to prevent future obstacles to trade within the single market, not retrospectively review all existing requirements.

Clause 16(5)(c)(i) provides that requirements already in force are not subject to the principles in Part 2. Clause16(5)(c)(ii) recognises that there will inevitably be new iterations of rules, which will in fact simply restate the previous rules that were in place. This provision sets out a threshold, beyond which the new requirement will be brought within scope, and that is where the requirement has changed in substance.

My noble friend in particular asks the meaning of “substantive change”, which her amendment would replace with the phrase “significant amendment”. This wording is simply intended to distinguish between those rules which are genuinely new and different from those which may have been in place beforehand, and those which are in fact substantively the same rules. My noble friend’s suggested change uses the term “significant”, which is less easy to quantify and suggests to me a higher threshold before which a change would bring the provision within scope of the principles in the Bill. “Change” and “amendment” are of course covering fairly similar ground, but I suggest that “amendment” would more commonly be used when talking about changes to text. Since Part 2 is operating on requirements imposed by or under legislation rather than the text of the legislation itself, we think, in these circumstances, that “change” is the most fitting word— but there will probably be lots of work for the noble and learned Lord, Lord Falconer, and his friends in interpreting this.

I turn now to Amendments 81 and 84. In Clause 21, a legislative requirement is one imposed

“by, or by virtue of, legislation”.

This extends beyond legislation to rules produced by bodies with powers delegated to them in respect of a particular field of regulation, and it may include licences or requirements contained therein. My noble friend’s Amendments 81 and 84 would appear to have the same effect. However, in my view, the term “of no effect” is the more appropriate to apply in respect of a licence or a non-legislative rule.

Turning now to Amendment 92, the purpose of the words “less attractive” in Clause 20(3) is to encompass requirements which are not outright prohibitive but which otherwise make it harder to offer a service in a particular market. Without these words, the clause could be read as referring only to actively punitive measures, when in fact it is intended to cover a broader range of harms under the definition of direct discrimination. My noble friend will no doubt also be aware of the amendment in my name to Clause 20, which seeks to clarify the meaning of the test for indirect discrimination in that clause—although the language that she highlights remains unaltered by it.

Amendments 89 and 102 from the noble Baroness, Lady Hayter, seek to remove the reference to the legitimate aims in Clause 20. These amendments should be read alongside the other amendments in the noble Baroness’s name. The wider purpose of all these amendments is to alter the legitimate aims in Clause 20. The amendments would have the effect of making the principle of non-discrimination almost absolute, not allowing any requirement which had an indirectly discriminatory effect, no matter how valid or urgent the justification. I suspect that this was not what the noble Baroness intended with this suite of amendments.

Clause 20(2)(d) provides that a requirement will be discriminatory only if it cannot be justified by a legitimate aim. Amendment 89 suggests removing that. Clause 20(9) provides that, to determine whether a regulatory requirement can be considered as a necessary means to achieve a legitimate aim, particular consideration must be given to the effects of the requirement in all circumstances and to the availability of alternative means to achieve that aim. This subsection is key to determining whether a legitimate aim may be relied upon. It is designed to assist the reader and its removal would hinder the effective application and operation of the test. The subsections are both key to the effective operation of the non-discrimination principle provided for by Part 2 of the Bill. I therefore cannot accept these amendments.

Amendment 103 relates to Part 3 of the Bill, concerning professional qualifications. As used in the clause, “mainly” has been used in this context to ensure that the majority of the experience that a professional is relying on is obtained in the United Kingdom. This is so that relevant authorities can reliably assess the professional’s experience. The decision to use “mainly” rather than “substantially”, or other similar words, is so that professionals can rely on their experience for this part of the Bill without it being interpreted as the whole of their experience needing to have been obtained in the UK. I hope, therefore, that this explanation satisfies the House and that the noble Baroness feels able not to press her amendment.

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Lord Falconer of Thoroton Portrait Lord Falconer of Thoroton (Lab)
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I go back to the very interesting answer that the Minister gave on the coal example. Let us assume that the coal example, which he described as being a prohibition on sale but not use, did not come in a pre-existing requirement and that it had been entered into after this Bill became law. I would be right, would I not, in assuming that such a requirement would offend against the non-discrimination principle under Clause 8? It is obviously a disadvantage to be able to sell coal to people who cannot use it. In those circumstances, it is valid only if that was a provision entered into after the Bill became law if such a provision was justified by one of the legitimate aims identified in Clause 8(6). Would I be right in assuming that? Would I be right in assuming that the question of whether the ban on the use of coal survived would depend upon a private law action between the supplier of the coal and the buyer of the coal?

Lord Callanan Portrait Lord Callanan (Con)
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I do not think the noble and learned Lord is correct in his assumption, but it is a detailed legal point, so I will take further advice and reply to him in writing.

Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, I thank noble Lords who have contributed to the debate, which poses more questions than even I had realised. I have also realised that I have not got a complete handle on the services that are covered. Are financial services excluded? I think auditing is excluded. It would perhaps be helpful if a note could be passed about what services are covered. I assumed they are cultural and intellectual property, education and architecture, but there are some interesting ones where there are big differences at the moment between countries.

I am particularly thinking of residential property, where Wales now licenses landlords and is ahead of us in licensing letting agents. We are now in discussion with the Government about the licensing—shortly, we hope—or authorisation of all property agents, but then that would be different between England and Wales and Northern Ireland and Scotland. Presumably all that would be caught by this, but I am not certain.

This is a genuine question and it would be really helpful to have, without it being part of the Bill and without it committing the Government to anything, a more useful note of what is covered. Then we could look at what is already different, particularly in licensing, as is certainly the case in the area that I know about of residential agencies in Wales and elsewhere.

In a sense, the bigger issue is the one I set out at the beginning. The noble Baroness, Lady Neville-Rolfe, put it much better. I was asking about the purpose of Part 2. I think the noble Baroness went further and asked whether we even need Part 2. It actually comes back to whether we need the whole Bill or whether the common frameworks road might be the better one, or, as the noble Baroness, Lady Finlay, asked, whether it might be sufficient to fall back on the 2018 position on what things could not be agreed—it would probably save an awful lot of this. The purpose of Part 2 needs justifying, rather than defining. Why do we need it? Is the noble Baroness, Lady Neville-Rolfe, correct that we do not need this level of detail?

If the Minister could also informally explain a little more about what would be covered, that would be helpful, and we might come back at a later stage to look at whether we could define why we have this part. However, for now, I beg leave to withdraw the amendment.

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Moved by
82: Clause 19, page 13, line 27, leave out “, and section 20,”
Member’s explanatory statement
This amendment is consequential on the amendment adding a definition of relevant connection to Clause 20 (page 14, line 16).
Lord Callanan Portrait Lord Callanan (Con)
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My Lords, in moving Amendment 82, I shall speak also to Amendments 83 and 85 to 88 in my name.

Clause 20 provides the test for assessing whether a regulatory requirement is indirectly discriminatory in relation to service providers. The indirect discrimination test comprises several elements, including a test for difference of treatment between incoming and local service providers and a test to assess whether the difference in treatment gives rise to an adverse market effect. This group of amendments would provide greater clarity to readers, particularly in relation to differential treatment and adverse market effect. The amendments would break up concepts previously included in Clause 20(4) and deal with the unequal treatment test separately from the adverse market effect test. This revised drafting also allows for clarification of the language.

This change delivers the same policy objectives but with greater clarity. It is supported by consequential amendments throughout Clause 20, including new definitions for local and incoming service providers. The definition of “relevant connection” is also moved into Clause 20 to link it better to the provision. Limb C of that definition is deleted because it is not relevant to indirect discrimination. A consequential amendment to Clause 19 supports this.

In my detailed remarks, I will focus on Amendments 90, 91 and 93 upon which the other amendments are consequential. Amendments 90 and 91 would provide greater clarity and break up concepts that were previously packed into Clause 20(4). They deal with the unequal treatment test separately from the adverse market effect test, and this division also allows for a clarification of the language. These amendments would introduce and define the concept of “relevant disadvantage”, tying it more clearly to the concept of unequal treatment between incoming and local service providers. Importantly, the more clearly laid out test for relevant disadvantage between local and incoming providers makes plain that it does not require all incoming providers to be disadvantaged or all local providers to be advantaged. That was the intended effect of the drafting; this amendment would ensure that it is clear.

Amendment 93 does two things. First, it defines local and incoming service providers—terms used in this group of amendments. Secondly, it copies the definition of “relevant connection” over from Clause 19, linking it more clearly to this provision. Limb C of the direct discrimination provision is deleted because it is not relevant to indirect discrimination.

Amendment 94, which is unrelated to the other amendments in this group, would simply remove a provision that is now no longer necessary. I beg to move.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con) [V]
- Hansard - - - Excerpts

My Lords, I apologise to my noble friend the Minister for speaking on a technical amendment. I support much of the Bill and have limited my contributions accordingly.

However, I want to ask for a fuller explanation of Amendments 90 and 93, which again relate to services. Why do we need to make a distinction between incoming service providers and local service providers? Will that not create uncertainties and its own form of discrimination? Is this an insurance policy, for example against unwise anti-competitive moves by a devolved Administration? Is there any evidence that such an outcome is at all likely, given their well-known attachment to the EU single market? What is the underlying purpose of this approach?

The Minister was not able to answer my question on Amendment 68 about how marketing activity would be treated, or indeed the question from the noble Lord, Lord Purvis, on local language capability. The distinction between incoming service providers and local service providers may be part of the answer. I would welcome some simple examples that make some of this service area easier to understand. If the Minister needs notice of the questions, perhaps he would be kind enough to write to me on these points, as it is late.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, like other speakers, I welcome the idea that this is a clarification of the language currently used in the Bill. However, like the noble Baroness, Lady Neville-Rolfe, I wonder whether what we have got is in fact any clearer, or makes us any more clear about what we are supposed to be doing with this part of the Bill.

The language is, in places, incredibly archaic and obscure. There seems to be no recognition of the digital world. Services provided through the internet are not going to be provided locally; they are not going to be provided “in a region” and there are not going to be local service providers, and yet there seems no reference to them or how they are to be treated. Even if that were not that case—even if we were not living in the virtual world—the idea that somehow a service provider has a relevant connection to a part of the United Kingdom if it has a registered office seems to ignore hundreds of years of the use of brass plates outside solicitors’ offices which provide registered offices but no services, no people, no contribution and no economic effect. Where is all this heading?

Lord Callanan Portrait Lord Callanan (Con)
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I thank noble Lords for the brevity of their contributions, particularly given the late hour, and I shall endeavour—they shall be pleased to hear—to match that brevity.

We think that these amendments make the test significantly clearer. The relevant concepts are unpacked in distinct subsections, and the new subsections more clearly express policy intention on how the test for indirect discrimination will function. The additional clarity ensures that businesses can operate with certainty, which is what this Bill is intended to ensure.

I have noted the requests from my noble friend Lady Neville-Rolfe—the noble Lord, Lord Purvis, repeated them several times—for details of how the service provisions will operate in things like marketing, language tests, et cetera, and for the legal definition of what “adverse market effect” means in practice. I will, of course, provide those for them in writing. With that, I commend these amendments to the Committee.

Amendment 82 agreed.
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Moved by
83: Clause 20, page 13, line 34, leave out the second “a” and insert “an incoming”
Member’s explanatory statement
This amendment would make clear that Clause 20 is concerned with incoming service providers.
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Moved by
85: Clause 20, page 13, line 35, after “that” insert “incoming”
Member’s explanatory statement
This amendment follows from the amendment to page 13, line 34 in my name.
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Moved by
90: Clause 20, page 13, line 44, at end insert—
“(2A) A regulatory requirement puts an incoming service provider at a relevant disadvantage if—(a) it puts the incoming service provider at a disadvantage in relation to the provision of services in the part of the United Kingdom in which the requirement applies, and(b) it does not put, or would not put, each local service provider at that disadvantage in relation to the provision of those services in that part (at all or to the same extent).”Member’s explanatory statement
This amendment would define the concept of relevant disadvantage, introduced by the amendment to page 13, line 39 in my name.
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Moved by
93: Clause 20, page 14, line 16, at end insert—
“(4A) For the purposes of subsections (1) to (4)—(a) an “incoming service provider” is a service provider that—(i) provides the services in the part of the United Kingdom in which the regulatory requirement applies, but(ii) does not have a relevant connection to that part;(b) a “local service provider” is a service provider that—(i) provides the services in the part of the United Kingdom in which the regulatory requirement applies,(ii) has a relevant connection to that part, and (iii) does not have a relevant connection to another part of the United Kingdom;(c) a service provider has a “relevant connection” to a part of the United Kingdom if the service provider—(i) has a registered office, place of business or residence in that part, or(ii) provides the services from that part.”Member’s explanatory statement
This amendment would define concepts used in the other amendments to Clause 20 in my name.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

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Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020

(3 years, 4 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 135-IV Revised fourth marshalled list for Committee - (2 Nov 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
107: Clause 25, page 19, line 24, at end insert—
“(d) in relation to any part of the United Kingdom, the profession of patent attorney or trade mark attorney.”Member’s explanatory statement
This amendment would add patent attorney and trade mark attorney to the list of legal professions the regulation of which is excluded from Clause 22.
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, Amendments 107 and 108 in my name aim to clarify the scope and application of the professional qualification clauses of the Bill. Amendment 107 adds patent attorneys and trademark attorneys to the list of legal professions excluded from the application of the automatic recognition principle in Clause 22. As well as work related to trademarks and patents, trademark and patent attorneys may carry out broader regulated legal activities which require an understanding of the underpinning legal system in the part of the UK in which they practise. Accordingly, we are bringing them into line with the other legal professions to ensure that they are not caught by the automatic recognition provisions of the Bill. These exclusions ensure that access to these professions is not affected in any way by the recognition provisions of the Bill.  Part 3 will not affect how these professions are regulated, nor will it change what activities trademark and patent attorneys are able to perform.

Amendment 107A has been tabled by the noble Baroness, Lady Bowles, in response to this government amendment and seeks to probe the effects of the amendment in respect of authorised reserved legal activities under the Legal Services Act 2007. In respect of this amendment, I reassure the noble Baroness, Lady Bowles, that nothing in the recognition provisions of the Bill, or in the government amendment, changes how reserved legal activities are authorised under the Legal Services Act 2007, and her amendment is therefore unnecessary.

Amendment 108 is a technical amendment to provide clarity on the type of qualifications and experience requirements to which Clause 22 applies. It ensures that where qualification requirements are attached to specific activities, those requirements are disapplied by automatic recognition only if they apply to activities that are essential to the practice of the profession in question—in other words, if they amount to a barrier to access to the profession as a whole. This will ensure that Clause 22 does not apply to qualifications or experience requirements for activities which are not essential to the practice of the profession, such as optional service activities which professionals may choose to offer.

I recommend that government Amendments 107 and 108 be accepted, as they provide clarity on the scope and application of automatic recognition principles. I regret, however, that I am unable to support Amendment 107A, for the reasons I gave earlier. I hope that the noble Baroness will feel able not to press her amendment. I beg to move.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD) [V]
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My Lords, I am a retired patent attorney, which is what made me curious about Amendment 107. I guess that is an interest of some kind, though no longer pecuniary.

In this group I have tabled Amendment 107A, which is intended to clarify what has become a confused situation. It can accurately cover all the legal professions named in Clause 25, although the confusion relates only to patent and trademark attorneys. Essentially, it says—as I think the Minister agreed—that there is no change to the status quo under the Legal Services Act 2007, which was the Government’s intention all along.

The background to this is that patent and trademark attorneys may be in the unique situation of being regulated and qualified on a UK-wide basis, while, through their sectoral professional qualifications, also engaging in four specific English and Welsh reserved legal activities, no matter where in the four nations of the UK they qualified, reside or practise. They do this as patent attorneys or trademark attorneys, not as lawyers.

The purpose of that unusual provision is, broadly, to enable conduct of litigation for all in the specialist England and Wales Patents Court, and for associated matters such as deeds and oaths to be dealt with. That unique construct does not fit within the definition of Clauses 22 and 23 for the professions when they are identified as patent attorneys or trademark attorneys because you cannot work it out so that there is a relevant part and the other part. Noble Lords are welcome to try—it takes quite a few pieces of paper. The point is that it is the same for all patent and trademark attorneys, wherever they are.

However, somewhere the niggling thought arose that perhaps it was confusing, or that the mutual recognition would apply notwithstanding that Clause 22 did not apply and would somehow extend the enjoyed England and Wales reserved activities to Scotland or Northern Ireland courts, deeds or oaths. Amendment 107 has, therefore, been proposed. It has the effect of defining patent and trademark attorneys as a legal profession in Clause 25, thereby putting them into Clauses 23 and 22 and simultaneously taking them out again. This hokey-cokey amendment was meant to stop confusion. It has, however, also created its own confusion, perhaps best illustrated in an explanation from the Ministry of Justice that said:

“If trademark and patent attorneys were not excluded from the UKIM bill, then one of your practitioners authorised to conduct litigation in Northern Ireland, for example, could potentially argue that under the automatic recognition principle IPReg must also allow them to conduct litigation in England and Wales without meeting the normal IPReg authorisation requirements for doing so”.


However, that does not fit the present circumstances that I have just explained. The patent or trademark attorney in Northern Ireland is qualified to conduct litigation in England and Wales but, actually, not to conduct litigation in Northern Ireland—and that is not the only wrong explanation that has been offered. Indeed, a few moments ago, the Minister referred to attorneys being qualified in respect of the part of the UK in which they practise. There is no such provision for patent and trademark attorneys. They just have that extra bit of add-on, no matter where they practise, which relates to being able to access the England and Wales Patents Court. That is quite fundamental, because that is where you would see appeals from the comptroller and so on.

I believe that a true analysis of the facts ends up as I have said, that these particular professions were not in the original construct, but some people might have been confused. Now they are defined as in and out again but, unfortunately, this leads to other confusions, suggesting divisions in the profession that do not exist but which have just been replicated in the words of the Minister. If the Minister and an MoJ official can get it wrong, who else might? A wrongful accusation, no matter that it can be refuted, is still damaging. My amendment clarifies that the status quo is maintained. It neither adds nor subtracts anything, other than giving clarity—something to point to on the same page as the confusing hokey-cokey.

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Lord Falconer of Thoroton Portrait Lord Falconer of Thoroton (Lab)
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My Lords, intellectual property lawyers, patent agents and attorneys are incredibly important for the future. I thoroughly endorse the remarks made by the noble Baronesses, Lady Bowles and Lady Neville-Rolfe, and my noble friend Lord Smith of Finsbury.

Honestly, confidence in this Bill was weak to start with. That mess-up just then on patent attorneys was appalling, and it made me look at the rest of Part 3. Could the Minister first of all identify what the problem is that Part 3 is dealing with? We had a clue between 11.30 pm and 11.45 pm on Wednesday evening when the noble Baroness, Lady Scott of Bybrook, who sadly is not in her place, said the following:

“The purpose of the professional qualification provisions in the internal market Bill is to ensure that professionals can, in most cases, access their profession in all parts of the UK, by ensuring that there is an overarching system for recognition.”—[Official Report, 28/10/20; col. 375.]


Clause 22 says that where you are qualified in one place, you can be qualified in another, while Clause 25 says that Clause 22(2) does not apply to existing provisions. Let us be clear what is happening here: the Government are saying that we are not making any change to the existing position in relation to professional qualifications, and as far as I am aware—and this is nothing to do with the EU—there is absolutely no problem about the current position. The effect of Clause 25(3) is that these provisions do not apply to any change in the future. Am I right about that? They are making no change for the past but they are bringing in these provisions in relation to the future. Why is that, when there is no problem about the past or the future? The Government are causing problems everywhere with this. I ask them to explain to the House and the wider public why on earth they are doing it. They have messed up the one area that we have looked at so far. Why should anyone have any confidence in this Bill?

On a separate point, I refer the Minister to what the noble Lord, Lord Dunlop—on the government side—said on day one in relation to this matter:

“The timetable for the Bill appears to be predicated on the end of the transition period on 31 December this year, but what is the real risk of regulatory divergence between then and the completion of the common frameworks process in 2021? The House is aware that the European Union (Withdrawal) Act 2018 already confers on Ministers so-called Section 12 powers to freeze devolved competence in relation to EU retained law.”—[Official Report, 26/10/20; col. 88.]


So, if there is any problem about this, it can be dealt with by the Government’s Section 12 powers. That applies not just to this but to wider issues.

Why are the Government bringing forward such an obviously unthought-out Bill that is doing damage to what—and I say this with respect to the noble Lord, Lord Naseby—even the noble Lord, Lord Naseby, thinks is a mess-up, and he is a supporter of the Government’s Bill? Why on earth are they messing everything up like this? Could they please give an answer to what the noble Lord, Lord Dunlop, said on day one? Is he right? If so, the urgency goes.

Lord Callanan Portrait Lord Callanan (Con)
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I thank all noble Lords who have spoken in this short debate on this important subject. I shall start by replying directly to the noble and learned Lord, Lord Falconer, and the noble Lord, Lord Clement-Jones, who spoke about Part 3 and why we felt the need to bring these proposals forward. The Bill is intended to ensure that divergence in professional regulation between the four nations of the UK does not increase barriers for professionals living and working in different parts of the UK. As our economy continues to develop and new sectors emerge, it is possible that new regulated professions will be created and there may be changes to existing qualification requirements that could make it more difficult to access the profession in another part of the UK. These new professions may well be crucial to the UK’s economic future. As in other areas, we do not want barriers to trade across the UK in these sectors. Internal market provisions will apply where part of the UK regulates a new profession, access to which is limited to those holding certain professional qualifications or experience. The provisions will also apply to existing professions where there are changes to the requirements for the qualifications or experience needed in order to access the profession concerned. Currently, while the recognition of professional qualifications between the four nations can and does occur, there is no overarching framework that ensures that it does. The Bill creates such an overarching framework to guarantee that recognition of qualifications between the four nations will be possible and barriers will be minimised.

I am happy to give the noble Lord, Lord Smith, and my noble friend Lady Neville-Rolfe the specific assurance they asked for: nothing in the recognition provisions of the Bill, including the exclusion, affects the current situation. IPReg will continue to be able to decide whether and how trademark and patent attorneys should be allowed to carry out the regulated legal activities that it is designated to regulate in all the different parts of the UK.

The government amendment aims to bring patent and trademark attorneys in line with other legal professions and to place them outside the scope of the recognition provisions of Clause 22 of the Bill. Legal professionals have been excluded from the scope of the provisions on the recognition of professional qualifications in acknowledgment of the different legal systems that exist in the UK. This will ensure that the regulation of and access to these professions, including trademark and patent attorneys, are not affected in any way by the mutual recognition provisions of the Bill and will be completely unaffected. That is why we need Amendments 107 and 108.

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Lord Falconer of Thoroton Portrait Lord Falconer of Thoroton (Lab)
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The noble Lord, Lord Callanan, referred to the idea of new professions being invented. If this happened, there would be a professional body that would need government recognition in some form. Could he give us an example, perhaps, of a new profession emerging without a professional body in relation to which there is a substantial risk? If there is no such example or evidence, it is incredibly unconvincing. The second and separate example he gave was an existing profession giving rise to a particular requirement that would create a barrier to entry in one part of the United Kingdom for another. Could he give an example of when that has happened in the past?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

By the very nature of it being a new profession or qualification, it is quite hard for me to give examples of what might happen in the future. There are all sorts of new technologies; even in the noble and learned Lord’s legal profession, there may be new technologies, ideas and proposals that will come forward. There is the whole world of artificial intelligence or gene editing—there is a massive range of new and potential professional areas, bodies and qualifications that may come forward. That is the point: we want the current situation in many of these professions to be unaffected, but, in the case of new professions, it is entirely possible that the individual nations of the UK might seek to regulate them differently, and we want no new barriers to trade to emerge.

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Lord Fox Portrait Lord Fox (LD)
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My Lords, with all due respect to the Minister, I am sure he understands how unsatisfactory that answer was. My noble friend Lord Thomas of Gresford talked about the gobbledegook of future-proofing, and this is gobbledegook. First, could the Minister tell your Lordships’ House what past examples lead the Government today to this conclusion? Secondly, why is there a problem with bringing any future issues to the Government and your Lordships’ House bespoke in the event that the Minister proves correct and something turns up? To seek to produce a Bill that covers all of the unknown unknowns that are going to happen in the history of time seems overambitious.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I think we are just going to have to differ on this one. We do not want to be returning to the House to create unnecessary difficulties and disagreements in the future; we want to ensure that, before any of these difficulties arise, we have put in place, as in the rest of the Bill, a framework that covers the whole of the United Kingdom to regulate how we will manage and control these issues in the future. That is all we are seeking to do. I understand the points that noble Lords are making. There are differently regulated professions in some parts of the UK already; we accept that and that the status quo is there, but we think that, in future, these things are best regulated on a UK-wide basis, and we want no new barriers to trade to emerge.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, this has nothing to do with powers repatriated from the European Union; it has everything to do with our internal United Kingdom approach. When was the last time that a professional body regulated by law was established where the Government considered there to be major barriers across the United Kingdom?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

The noble Lord will be well aware that there is European directive on this subject, and mutual recognition of professional qualifications, so, even in the EU law space, it is accepted that the nations of the EU have different ways of recognising different professional qualifications. I commend Amendments 107 and 108 to the House.

Amendment 107 agreed.
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Moved by
108: Clause 27, page 20, line 35, at end insert—
“(1A) Provision that limits the ability referred to in subsection (1)(a) to individuals with certain qualifications or experience falls within section 22(1) only if the activities affected by the provision are, in a significant number of cases, essential to the practice of the profession in question.” Member’s explanatory statement
This amendment would provide that provision imposing qualification requirements on particular professional activities falls within Clause 22 only if the activities are, in a significant number of cases, essential to the practice of the profession in question.
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We will come to the exact status of the OIM in a later group with Amendment 115, in the name of my noble friend Lord Stevenson, but I agree with what the noble Baroness, Lady Neville-Rolfe, said that no case has been made for the OIM to be in the CMA. The noble Baroness, Lady Noakes, said there had been no consultation; it just sort of appeared. In fact, I share with her the view that it could disappear into the CMA’s back room. Even if our solution happens to be a different one, we share a diagnosis of that problem. We will discuss in a later group whether we want it to be outside of the CMA, but for now the important point that we are trying to signal is that the OIM should have some independence. We want to make sure that it is not in any way in hock to just one of the four Governments, who must work very closely together if we are to make this internal market work and thrive, as we all wish to see.
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, I thank everyone who has participated in this group. I will seek to take forward the suggestion of the noble Baroness, Lady Hayter, that letters be copied around—I have another batch on my desk to approve once we have finished this debate, many of which, I am sure, are to my Liberal Democrat colleagues. I will ensure that they are circulated to all the protagonists. They are not particularly secret; they just help to clarify and explain the Government’s role and answer the many questions that we have been asked. I hope that is helpful.

I will start with Amendment 110, which seeks to replace Clause 28 with a new clause on the establishment of the Office for the Internal Market. As noble Lords will know, this Bill will create an Office for the Internal Market within the Competition and Markets Authority to carry out a set of independent advisory, monitoring and reporting functions to support the effective operation of the UK internal market. The proposed new clause seeks to create a new and separate public body that reports to the BEIS Secretary of State. The effect would be not to establish the Office for the Internal Market within the Competition and Markets Authority.

Let me say in response to my noble friends Lady Neville-Rolfe and Lord Naseby and the noble Baroness, Lady Hayter, that the Government did consider a wide range of delivery options for the advisory, monitoring and reporting functions of the UK internal market, as set out in the Bill. We concluded that the Competition and Markets Authority is best suited to house the OIM to perform these functions. The CMA is an independent non-ministerial department that currently operates at arm’s length from the Government. It is sponsored by BEIS and Her Majesty’s Treasury and—to answer the question posed by my noble friend Lady Neville-Rolfe—Ministers will be responsible to Parliament in reporting on the work of the CMA and the Office for the Internal Market, even though they operate at arm’s length.

The Competition and Markets Authority has built up a wealth of expertise and experience that makes it a natural fit to take on these additional functions. It has a global reputation for promoting competition for the benefit of consumers and for ensuring that markets work well for consumers, businesses and the wider economy. It will also build on the CMA’s existing technical and economic expertise, which will now support further development of the UK internal market.

I should also explain that it is government policy that new arm’s-length public bodies should be only set up as a last resort and when consideration of all other delivery options has been exhausted. Other delivery options that should be considered include utilising existing bodies in order to deliver any new functions. New public bodies should be created only if there is a clear need for the state to provide the function or service through a public body and if there is no viable alternative—effectively establishing new public bodies as a very last resort. For the reasons that I have set out, we are not able to agree with this amendment. I hope that my noble friend Lady Neville-Rolfe will feel able to withdraw it.

Regarding Clause 28 stand part, this clause defines regulatory provisions on which the CMA, through the OIM, will monitor and provide reports and advice. The purpose is to set out the areas where the OIM will perform functions under the Bill, in order to ensure certainty and transparency for Administrations, businesses and the general public in connection with the effective operation of the UK internal market. Regulatory provisions are within scope if they set requirements for the purposes of the mutual recognition and non-discrimination principles of the Bill for the sale of goods and the equivalent for services. Moreover, regulatory provisions are within scope if they apply to one or more nations but not the whole of the United Kingdom. Clause 28 as it stands forms an integral part of the provisions for the OIM to carry out its independent, advisory and reporting duties in respect of the UK internal market. For these reasons, therefore, I am unable to accept the proposal that Clause 28 should not stand part of the Bill.

On Clause 29 stand part, removing Clause 29 would remove the Competition and Markets Authority’s objective when exercising its functions as the Office for the Internal Market. This clause designates the CMA, in its capacity as the OIM, as having a specific role in the operation of the UK internal market. It is additionally important to note that this clause establishes the statutory objectives of the CMA in its capacity as the OIM. This clause will ensure that the CMA in its OIM role is able to operate effectively as the monitoring body for the internal market, and will ensure there is no confusion between the pre-existing powers of the CMA and those newly conferred upon it as the OIM. Distinct objectives will prevent any operationally problematic blurring of functions. Clause 29 as it stands forms an integral part of the provisions for the OIM, and therefore we are unable to leave it out of the Bill.

Moving on to Clause 41 stand part, removing this clause would leave out vital definitional provisions. This clause provides key definitions for the purposes of this part of the Bill. This includes a definition of the Competition and Markets Authority itself and sets out how widely the operation of the internal market in the United Kingdom should be understood. This clause also defines “Relevant competence” in Part 4 as meaning both reserved and devolved competence so that executive and legislative competence in each territory is included. Clause 41 as it stands forms an integral part of the provisions for the CMA in its capacity as the Office for the Internal Market: it ensures legal clarity and certainty on technical terms used throughout this part. For all those reasons, therefore, I am unable to accept the removal of this clause.

Amendment 111 would require the CMA to not engage in any form of dispute resolution while fulfilling its responsibilities as outlined in Part 4. This addresses the points made by the noble Lord, Lord Palmer. In cases of disagreement between one or more Administrations, the OIM, within the CMA, could be called upon to provide a non-binding report to support intergovernmental discussion. An assessment of economic impacts will ensure a technical underpinning to an otherwise political discussion.

Ultimately, the OIM only supports the resolution of disputes among the Administrations politically, and it does not adjudicate. The Government believe that building upon existing intergovernmental arrangements is the best approach to resolving any potential disputes, and this includes mechanisms such as common frameworks and intergovernmental relations, according to a clear and agreed process. The OIM will have its role in disputes between individuals and businesses, but businesses can request that the OIM consider disputes as part of its regular reporting. It is under no obligation to do so, nor will it have the authority to adjudicate on the specific issues.

Amendment 113 would prevent the necessary flow of information from the Competition and Markets Authority to the Secretary of State as the policy’s sponsor. The clause in question allows the CMA to alert the Government when it thinks adjustments may be needed to the way it fulfils its statutory functions, or it wishes to raise issues of particular concern. This is in line with precedent for similar public bodies and mirrors provisions in the existing legislation underpinning the CMA. Removing this provision would hamper the necessary communication between the Government and the CMA across all the other provisions in Part 4. For that reason, we are unable to accept the amendment.

Amendment 155 would make it an explicit statutory duty of the CMA, under its existing duties within the Enterprise and Regulatory Reform Act 2013, to protect and promote the interests of consumers in respect of the internal market. The clause in question establishes the statutory objective of the Competition and Markets Authority in its capacity as the OIM. It will ensure that the office is able to operate effectively as the monitoring body for the internal market and that there is no confusion between the pre-existing powers of the CMA and those newly conferred upon it. Distinct objectives will prevent any operationally problematic blurring of functions. The OIM will operate for the benefit of all those with an interest in a smoothly functioning internal market, be they regulators, businesses, professionals, the four legislatures or consumers. Explicitly narrowing its focus to consumers would, in our view, be to the detriment of all the other stakeholders I have listed. Therefore, I am unable to accept the amendment.

Lord Alderdice Portrait The Deputy Chairman of Committees (Lord Alderdice) (LD)
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I have received a request to speak after the Minister from the noble Lord, Lord Fox.

Lord Callanan Portrait Lord Callanan (Con)
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I see the request has the enthusiastic endorsement of the noble Lord, Lord Foulkes. Therefore, as his biggest fan in the House, I am obliged to follow the idea put forward. I will of course write to the noble Lord, Lord Fox, on that.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
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My Lords, this has been a good debate on an important group of amendments. We are not all agreed, but most of us are doubtful about the decision to allocate the office for the internal market to the CMA in the way the Bill proposes. I favour an office with ministerial leadership—there is a parallel with the EU’s single market commissioner, which has worked well in many ways.

The noble Baroness, Lady Bowles, made an expert and very strong case from a different perspective. She rightly pointed to the huge powers and penalties involved in giving this role to the CMA, and explained useful background as to why it ended up in the CMA, linked to an earlier time when state aid rules were going to be part of the portfolio. She also highlighted a concern about how the arrangements will work for the devolved Administrations, which the noble Lord, Lord Palmer of Childs Hill, developed in more detail and which was referred to by the noble Baroness, Lady Hayter.

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The noble and learned Lord, Lord Mackay of Clashfern, suggests this method in Amendment 171. At the moment, I have been persuaded that the suggestion that the common frameworks process be recognised in the Bill looks more attractive. Could the Minister indicate the Government’s position on Amendment 171 and on whether the common frameworks process should be recognised in the Bill? That would definitely provide a solution.
Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
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My Lords, it gives me great pleasure to seek to reply to this extremely interesting debate. I agree with the noble and learned Lord that this is an extremely important area to consider. There were times in the speech of my noble friend the Duke of Montrose when I reflected that I was probably the 14th Mr True in the context of this discussion. I pay tribute to his ancestors for their long service to the Crown and the country of Scotland. It is true that the Act of Union is still of fundamental importance.

I am extremely grateful, as always, to my noble and learned friend Lord Mackay of Clashfern. Everybody who spoke recognised the good, unionist motivation to seek conciliation and collaboration which lay behind his amendments. I think that was shared by even my noble friend Lord Naseby. Often in debate we are asked to measure quantity and quality; although my noble friend was alone until now in saying that these amendments were perhaps not right for the Bill, I welcome his support.

Turning to the speech and proposals from my noble and learned friend, his Amendments 114, 141 and 171 seek to place obligations on the Joint Ministerial Committee on EU Negotiations—my noble and learned friend suggests this should be the core body—to be consulted on a number of considerations relating to the operation of the internal market.

I have been asked about the work of intergovernmental operations. The JMC (EN), which is the subject of these amendments, is a sub-committee chaired by my right honourable friend the Chancellor of the Duchy of Lancaster. It meets at regular intervals to facilitate political engagement between the UK Government and the devolved Administrations on the outcome of the UK’s exit from the EU, of which this Bill is one consequence. In total, since 2016, it has met 25 times, including the meeting that took place on 3 September 2020. The JMC system provides central co-ordination for the IGR machinery. I will come back to that later.

Before I address the amendments individually, I stress that the Government agree that the internal market should be underpinned by an effective system of governance and consultation between the four Administrations of the United Kingdom. However, we argue that the Joint Ministerial Committee on EU Negotiations is not the most appropriate or effective intergovernmental structure to engage on such technical considerations. As I mentioned, it was established in 2016 and has been valuable since then; it involves Ministers from each Administration.

I say with all respect to the noble Lord, Lord Purvis of Tweed, that there is no antithesis in regretting—as I hope he does—the decision of the Scottish Administration to withdraw from internal market discussions last March, as I referred to in a recent speech in your Lordships’ House, while seeking to continue co-operative work in the broad area of intergovernmental relations and through the common frameworks process. I will return shortly to the points on that made by the noble and learned Lord, Lord Falconer. The United Kingdom Government seek co-operation and understanding between the different Administrations. We want effective governance and consultation.

Through the review of intergovernmental relations, which is going on at the moment, as your Lordships are aware, we are working together with the devolved Administrations to revise and update the existing JMC system. Good progress is being made and we look forward to reporting on our finalised governance and parliamentary reporting structures in due course. As such, it would be counterproductive to pre-empt the conclusion of the review of intergovernmental machinery and place these obligations on the existing Joint Ministerial Committee, which would perhaps not be the most appropriate forum.

The noble and learned Lord, Lord Falconer, asked how disputes relating to the internal market should be resolved. Where disagreements relate to the internal market impacts of specific regulations that fall under a common framework policy area, it is anticipated that they will be considered through the dispute resolution mechanisms for individual common frameworks. The Government remain committed to resolving issues, including those relating to the UK internal market, at the lowest possible level. Most conversations on the UK internal market should therefore take place at departmental level to consider the impact on the UK internal market of individual policies at the technical level. This will be done through increased and improved engagement across all UK government departments and their devolved Administration counterparts. The proposal for reforming the formal process for avoiding and resolving intergovernmental disputes was jointly drafted by officials from all Administrations and endorsed by Ministers.

The UK Government are committed to the principle of dispute avoidance, as all Administrations continue to work closely behind the scenes to resolve issues through constructive dialogue, rather than detailed procedure. In the past, differences rarely escalated into disputes—in only four instances, I am informed. We can therefore expect the principle of dispute avoidance to remain central to managing disputes in the future.

My noble and learned friend suggested a specific function for the JMC (EN) on these issues. Amendment 114 requires that the committee be consulted prior to a task group of the Competition and Markets Authority being set up. We have already written into the Bill, in paragraph 2(3) of Schedule 3, that the Secretary of State will consult devolved Administrations prior to the appointment of panel members to the office for the internal market. The noble Lord, Lord Purvis of Tweed, referred to this. He said that it is just appointing the panel members but, in appointing members to a panel, it stands to reason that the devolved Administrations, being consulted, will be aware of the purpose for which that panel is being created.

In addition, we need to think carefully before compromising the independence of the CMA. The CMA is an independent non-ministerial department with a global reputation, as my noble friend Lord Callanan argued on an earlier group. Ministers have no day-to-day involvement in its operations. So that the advice and outcomes of the OIM’s work is trusted, its advice and future panels must be seen as impartial. There can be no suggestion of political interference, at any point. The involvement of a political engagement forum would therefore not be appropriate, in our judgment.

Amendment 141 then requires that all periodic reports by the office for the internal market on the operation of the UK internal market are laid before the JMC (EN). Subject to Clause 31(7) and Clause 34(3)— which the noble and learned Lord, Lord Falconer, pointed out, are governed by Clause 30(1)—the OIM will lay reports to the UK Parliament and each of the devolved legislatures. It will be for the relevant Administrations and legislatures, which receive the reports, to determine the most appropriate course of action, rather than a committee such as the JMC (EN).

Finally, Amendment 171 places an obligation on UK Ministers to bring regulations proposed under powers in the Bill to the JMC (EN). It suggests that, in the absence of agreement, UK Ministers would be obliged to lay reasons for the failure to agree before both Houses of Parliament and to table a Motion for a debate on the proposed regulations and the disagreement. I understand why my noble and learned friend is searching us on this point, but this mechanism is likely to introduce considerable delay in the implementation of policy to protect the internal market. Such a process would not facilitate timely discussions, given the frequency of such JMC (EN) meetings, and could undermine Parliament’s responsibility to legislate for the internal market as a whole.

I do not normally like to go with technical objections to amendments, but this amendment, as well as creating a new procedure for all powers across the Bill, would change the way regulations are made for Northern Ireland. It would require all the devolved Administrations to consent to regulations for Northern Ireland. Even if my noble and learned friend were minded to go forward on this route, and I hope he is not, we would have to respect the particular regulating arrangements for Northern Ireland in the Bill.

In summary, I hope noble Lords agree that, although these matters are important—I do not resile from the importance of the considerations raised and I will reflect on the debate—there are clear limitations to using the JMC (EN) in this capacity, particularly for measures relating to the office for the internal market, where there are already provisions in place to report directly to the Senedd, Holyrood and Stormont. With this in mind, I ask that this amendment be withdrawn.

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Lord Fox Portrait Lord Fox (LD)
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I appreciate the Minister’s reply on the important points put forward. Whether the amendments of the noble and learned Lord, Lord Mackay, are adopted or there is some other form of regulating the relationship between the UK Government and the devolved authorities, does the Minister agree that there can be a smooth-running internal market only if there is trust between the UK Government and the devolved authorities? Could the Minister say what the Government’s assessment is of the effect on that trust of publishing the Bill?

Lord True Portrait Lord True (Con)
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My Lords, I strongly agree on the principle of trust between all parties in a negotiation. It is not always there in every negotiation, but this is more than a negotiation; it is a relationship. It is a life together, which we all wish to carry forward as the four nations and peoples of these islands. Standing at this Dispatch Box, I have sought to assure the House of the Government’s total commitment to proceeding with trust and respect. That has to come from every Government and institution in the United Kingdom. I go no further than that. I do not believe that seeking to set out a common approach to the management of the UK internal market in the UK Parliament, to which all four nations of this kingdom send representatives, should in any way undermine trust.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, can the Minister confirm that the discussions of the intergovernmental review, the conclusions of which we are asked to await, will specifically cover the operation of internal market legislation? Until now, as the Minister knows, legislative consent has been denied by both Wales and Scotland. The Minister repeated today that he regretted that the devolved Administration of Scotland has walked away from single market considerations. Will the intergovernmental fora that were referred to specifically cover the internal market?

Secondly, in their joint letter to my noble friend Lord Fox, the noble Lord, Lord Stevenson, and me, the Minister and the noble Lord, Lord Callanan, stated that the office for the internal market will have a role in providing independent advice in the dispute resolution process. With regard to the devolved Administrations in the intergovernmental fora, has it been confirmed that the OIM will have a role in dispute resolution?

Lord True Portrait Lord True (Con)
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My Lords, I believe I heard my noble friend Lord Callanan addressing this point in the previous group and that there was talk of a letter. I may have misheard but, if such a letter were proposed, I would not want to interpose my rather excessively considerable body between my noble friend’s pen and your Lordships’ House. But I take the point. If it is not covered in the response that my noble friend Lord Callanan has promised, I will address it. I am not pleading for an institutional parsing of the text in my comments, but I repeat that we are jointly exploring a number of options to strengthen the impartiality of the intergovernmental dispute resolution process. We hope it can be carried forward successfully.

Lord Mackay of Clashfern Portrait Lord Mackay of Clashfern (Con) [V]
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My Lords, I am grateful for the general support for my proposal to require co-operation between the devolved Administrations and the UK Parliament. I am sorry that my good friend, my noble friend Lord Naseby, does not care for it. I am not sure why that is, because I do not think that what I am proposing would damage in any way the independence of those seeking to set up a task force. All I am concerned about is that the task force should be familiar with the various areas of the United Kingdom that will be affected by the dispute in question. However, I have to be thankful for the support of your Lordships for the general principles that I am trying to further.

I am using the JMC (EN) because I understand that, at the moment, it is the body that is running the common frameworks policy. I want to make it absolutely clear that I am strongly supportive of the common frameworks policy and of bringing together in that connection various important matters. The system seems to work well. I am happy to use any organisation that the Government come out with for continuing that work with a degree of friendship.

I indicated in my speech at Second Reading that although the Scottish Government had stood apart from the situation in a formal way, they were apparently encouraging support for trying to resolve the main problems of the internal market in the common frameworks policy. As far as I can make out, that is the position. Needless to say, I got that information from the Scottish Government. It is a description of our situation which shows a certain degree of separation and co-operation at the same time; I very much welcome that co-operation.

The general point of who will eventually run this is a matter that I cannot anticipate. Therefore, when I use the JMC (EN) in my amendments, I am simply using what I understand is the present situation. The Government may well be able to produce a better system and, if they do so, I will be glad of that. In the meantime, I think that there is general acceptance of the view that the devolved Administrations need to be closely involved. After all, in Scotland at least there is a very strong interest in this, because something like 60% of its exports go to the rest of the United Kingdom. An internal market that functions properly and fairly is very much in Scottish interests, and I certainly would like to do everything I can to promote that.

In the light of the very good response I have had from my noble friend Lord True, I am happy to withdraw my amendment.

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Consultation is inadequate. At the very least, there has to be consent, and I hope the Minister will give the House the absolute confidence not just that he is listening but that he will take back the message to those who, I hope, will enable us to have a consensual approach by Report stage.
Lord Callanan Portrait Lord Callanan (Con)
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I thank all noble Lords who have spoken in the debate so far. At the risk of agreeing with the noble Baroness, Lady Hayter, I can say I have been listening very carefully to what everyone has had to say in this debate. We take these matters extremely seriously.

Let me respond directly to the question from the noble Lord, Lord Purvis. No: the CMA did not respond formally to the consultation when we issued it, but as you would expect, there has been extensive, official-level discussion on the design and development of the OIM proposal with the CMA.

Before addressing the individual amendments, I shall set out why Clause 30 and Schedule 3 should stand part of the Bill. I have set out the purpose of the office in previous groupings, and noble Lords will be delighted to hear I will not repeat that here.

The purpose of Clause 30 is to introduce the office for the internal market panel and task groups and allow those task groups to carry out all the functions set out in Part 4 of the Bill on behalf of the Competition and Markets Authority. This will ensure that the CMA, through the OIM, can carry out a set of independent, advisory, monitoring and reporting functions to support the development and effective operation of the UK internal market on an ongoing basis. Building on existing governance arrangements, it allows the CMA to authorise the task groups to do anything that the CMA can do under Part 4. This would include delivering specific pieces of reporting, such as annual health of the market reviews or requested monitoring on the intra-UK trade impacts of specific regulations.

To fulfil those independent functions, Schedule 3 sets out the constitution of OIM task groups, to which functions of the CMA may be delegated by virtue of Clause 30. Schedule 3 also provides for the establishment of a panel from whose members such groups may be selected. In performing its role, the OIM will have the ability to gather market intelligence from UK businesses, professionals and consumers to develop its evidence base. The effect of removing Schedule 3 would be that no public body undertook those independent advisory, monitoring, and reporting functions to support the smooth running of the UK internal market. The Government believe that this outcome would be detrimental to the future health of the internal market and to the benefit of every region and nation of the UK. Thus, it is crucial both Clause 30 and Schedule 3 stand part of this Bill.

Amendment 116 would insert a new clause seeking to ensure that the creation of the OIM was subject to a memorandum of understanding being agreed between the Secretary of State and Ministers in the devolved Administrations. It also seeks to set out how the OIM should handle and use information that it requires to fulfil its functions. It proposes that the office for the internal market panel and task group members should include nominees from the English regions and devolved Administrations. It also proposes who should be members of any internal market work undertaken by the CMA if it undertakes such work separately from the OIM. I will respond to these latter points later, as they are referenced within other amendments.

The Government have considered a wide range of delivery options for the advisory, monitoring and reporting functions for the UK internal market as set out in the Bill. We have concluded that the CMA is best suited to house the OIM to perform these functions. This option was strongly supported by a wide range of stakeholders during the White Paper consultation earlier this year.

The Government have sought to work closely with the devolved Administrations. For example, I would like to say how much the engagement with the Welsh Government to date on this Bill has been appreciated. I believe these conversations have helped enormously to ensure that the purpose and effect of the OIM is understood. The Government are committed to continuing to engage constructively with the devolved Administrations on the establishment of the OIM and how it operates in future in fulfilling its functions as set out. In recognition of the keen interest of the devolved Administrations in the operation of the UK internal market, these appointments will be made following consultation with Ministers from all three devolved Administrations. This will ensure that the panel comprises members who all represent the interests of stakeholders in all parts of the UK. For the reasons I have set out, I am not able to accept the amendment by the noble Baroness, Lady Bowles.

I turn to Amendments 117, 121, 122, 123 and 124. Amendment 117 would allow each devolved Administration to appoint a CMA board member, with Amendments 121 through to 124 setting the terms and conditions of those appointments. The CMA is an independent non-ministerial department with a global reputation for promoting competition for the benefit of consumers and ensuring that markets work for consumers, businesses and the economy. Ministers have no day-to-day involvement in its operations. It is for these reasons that the CMA is a natural choice to take on the functions of the OIM.

The noble Baroness, Lady Randerson, asked how it is that the CMA deals with reserved matters but the OIM can address devolved issues. The statutory objective of the OIM in Clause 29 is designed precisely to draw a distinction with the current CMA objective and functions. This is wholly compatible with operating effectively and independently in relation to devolved matters, with a difference in focus on devolved and reserved matters respectively.

So that the advice and outcomes of the CMA’s work and the members undertaking such work are trusted and continue to be seen as impartial, it is clearly important that board members and the appointments process are seen to be trusted. As my noble friend Lady Noakes said, board members must be seen as capable of overseeing the promotion of competition throughout the entire United Kingdom, rather than as a representative of any one individual nation. It would therefore be inappropriate to risk politicising the CMA’s board by accepting this amendment.

Having different routes to the appointment, resignation and removal of CMA board members would be at odds with the UK-wide remit of the CMA and would have the effect of creating two categories of member. I recognise the keen interest of the devolved Administrations in the appointment process for the CMA board given that the proposed OIM panel chair will, by extension, become a CMA board member. We have stressed during engagement and written into the Bill that devolved Administration Ministers will be consulted on appointments ahead of the OIM becoming operational.

Amendments 118, 119 and 120 propose devolved Administration consent mechanisms for appointing the chair and panel members of the OIM. The first two of these amendments would require the Secretary of State to seek the consent of the devolved Administrations before appointing the OIM’s chair and panel members. As it stands, the Secretary of State appoints the CMA board chair and will appoint the OIM panel members and chair with full and mandatory consultation of the devolved Administrations. The priority will be ensuring that each appointment is on the basis of the relevant range of expertise and, crucially, is someone who can serve the interests of the whole of the United Kingdom.

During this consultation and the appointment process, the Secretary of State will aim to work closely with the devolved Administrations to ensure that their interests and comments are taken fully into account before decisions are made on who should be appointed. These amendments, on the other hand, would encourage a narrowing of expertise and risk the effective establishment of the panel. Consent would give each Administration a veto, which could delay and politicise appointments, which would undermine the OIM from the outset. For those reasons, I cannot accept these amendments.

Amendment 125 would require CMA’s proposed and finalised annual plan and annual report to be laid before each Parliament of the devolved Administrations. I assure noble Lords that the Government share the concern of the noble and learned Lord, Lord Thomas, that adequate opportunities for debate and scrutiny of the CMA’s annual report and other documents exist for the devolved legislatures. The Enterprise and Regulatory Reform Act 2013 requires arrangements to be made to lay the annual plan and report to Parliament; in practice, they are also laid before each devolved legislature. I assure noble Lords that this will continue in future. Should this reassurance be insufficient, the CMA’s annual plan and report are made public, allowing each legislature to scrutinise and debate them if it sees fit. In the light of those reassurances and reasons, I hope that noble Lords will not move their amendments.

Amendments 126, 128 and 129, and subsections (2)(b) and (4) of the new clause proposed by Amendment 116, would require either the OIM panel or task groups to have representatives from each of the four nations of the United Kingdom. This amendment could lead to members of the relevant task groups placing regional or political interests ahead of the CMA’s UK-wide mandate. This would harm the OIM’s ability to monitor the internal market effectively. All panel members chosen to be on each task group should represent the UK as a whole when undertaking reporting for the OIM. For that reason, I am unable to accept these amendments.

Amendment 127 would increase the mandated size of an OIM panel group from three members to five. Having consulted the CMA carefully on this and other points, the Government are confident that three members are sufficient to provide the range of expertise necessary to undertake the work of a task group. Since the panel may need to be able to form multiple task groups at a given time, increasing above this number would reduce the resilience of the panel as a whole and create additional unnecessary expense. For this reason, I hope the noble Lord will not press his amendment.

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Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I apologise for detaining the Committee; I know I spoke at length on this group. Can the Minister clarify something that he said at the outset? I heard him say that responses to the consultation supported the Government’s proposals for the CMA having this role, but I have the White Paper and the consultation in front of me. No one asked; the Government did not ask. The CMA is not mentioned at all, as I think the noble Baroness, Lady Noakes, indicated. In fact, questions 3 and 4 do not refer to the CMA, and in the entire section the CMA is not mentioned. To resolve this, would the Government publish the consultation responses before Report, or can the Minister clarify in his remarks that he may have inadvertently misled the Committee?

Lord Callanan Portrait Lord Callanan (Con)
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I will certainly check that, and of course I will respond to the noble Lord if that proves incorrect. We obviously proposed the creation of the office for the internal market in the White Paper and said that we were interested in views—the noble Lord, Lord Purvis, shakes his head but I think we did. I will clarify that for the noble Lord in writing, in one of the many letters that I will be sending him. I definitely remember having discussions at the time of the White Paper with many noble Lords whom I spoke to during the consultation. We certainly discussed at the time how the creation of a new body would best monitor the function and effectiveness of the UK internal market process in the context of the White Paper, but I will certainly clarify that for the noble Lord in writing.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD) [V]
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My Lords, we have had an extensive and thoughtful debate, and I thank all noble Lords who have taken part. I thank my noble friends Lord Palmer and Lord Purvis for supporting my amendments, and indeed others who have mentioned them; one who springs to mind is the noble Baroness, Lady Altmann. As ever, the major constitutional issue has taken pride of place over technical issues. I am sure that noble Lords have realised that I am rather interested in the technical issues too, but we will end up having to come to grips with them, so I will not reiterate now.

To comment on some of what has been said—I cannot do justice to all speakers—my noble friend Lord Palmer said that there needed to be much more clarity to the OIM, and that we needed to resolve the ambiguity of its structure, flesh out how it works and find out what it meant in real terms. I think that is also the basis for a lot of other thoughts, whether they are technical or to do with devolution. What comes out loud and clear is whether all parts of the UK will feel that they have voice or ownership. My noble friend Lady Randerson led with the proposals that others have also spoken on and which have the support of the Welsh Government. It is all about having a structure that is workable for everybody and not part of something working inside the UK Government.

The Minister says that the CMA is independent. I accept that to a large extent that may be true, but there is still the problem that its strategy can be directed or steered by BEIS. That is just not the way to give the devolved Administrations confidence when, as has been outlined, the hybrid role of UK Ministers leaves us in the rather unsatisfactory situation of the same person trying to arbitrate. It is like the referee in the rugby match that my noble friend Lady Randerson referenced. Indeed, the noble Lord, Lord Wigley, said that basically the referee cannot be the manager of one of the teams—which rather seems to be the situation that we have here.

Some very valid points were made by the noble and learned Lord, Lord Thomas of Cwmgiedd, who said that judges had to be drawn from the different parts of the United Kingdom who understood everything vis-à-vis their specialist knowledge. I would not hold myself out at the level of a judge. I am not bad when it comes to negotiating things internationally, but I am English and would never hold myself out as being able to represent the positions of the devolved Administrations. I know that there are known unknowns that I do not know, and that is the situation we have to recognise. Whatever the integrity of the people on the CMA, you just do not know that the background is there unless they are drawn from a diverse field. I am very much one of those people who says that you cannot have sectoral interests, but this is different. I do not consider that devolution is political in that sense—we are all trying to get on together.

The noble Baroness, Lady Finlay, made a very interesting point when she suggested that it could perhaps be an interim measure because it has all been brought together very quickly. The noble Lord, Lord Hain, investigated the governance of the CMA and came up with many of the same conclusions as others. The noble Baroness, Lady Bennett, echoed that it is all about a voice for the legislatures and how to keep devolution alive.

As I said, I share with the noble Baroness, Lady Noakes, the view that the CMA is meant to be a UK-wide body and that nominees are not always the best people, but what is good enough for judges is, I think, good enough for the OIM. Yes, perhaps you always have to compromise, but my compromise comes down on the side of voice and ownership; otherwise, the body will never be trusted, as the noble Lord, Lord Empey, said. You have to have the confidence of knowing that people are properly at the table. I acknowledge that we have had rather haphazard devolution but, just because we have left the EU, that cannot be solved with “Whitehall knows best” and by taking back things that properly have been devolved.

The noble and learned Lord, Lord Hope, supported consensual Motions and said that consultation is not a guarantee. The noble Lord, Lord Cormack, warned us of the danger of a broken United Kingdom, emphasising again that there was a need for more time to be taken and for more confidence. The noble Lord, Lord Judd, had a good point in suggesting that we need a federal UK. That would perhaps make things easier, but we are not able to resolve that now—so, as he said, it comes back to understanding separate identities and to ownership.

The noble Baroness, Lady Altmann, supported some of my amendments and wanted the proper involvement of all parties. She also felt that the CMA was the wrong home, and really was not a viable place or a viable alternative to constructing a new body, because of the strategic involvement of BEIS and HMT, and because of it not being sensitive to matters of small businesses and diversity.

The noble Baroness, Lady Ritchie, was I think the first to bring forward the same points about needing a degree of independence and embracing the devolved legislatures, and also the fact that the Constitution Committee had also asked, “Why the CMA?” This was echoed by the views of my noble friend Lord Purvis. I agree with him; I could not find the flagging up of the CMA. It may be that one respondent said “a body such as the CMA”, but I did not see any consultation on it being the CMA or whether it was appropriate. The noble Baroness, Lady Ritchie, and other noble Lords also pointed out that the CMA is used to dealing with private business and enterprise and has a BEIS strategic influence.

I cannot begin to summarise what was said by my noble friend Lord Purvis, but the fact is that the CMA is left trying to analyse hypothetical benefits. It is true that we do not really know how this is all going to work out. If noble Lords follow the logic of my noble friend’s argument, they will find that he concluded by asking what incentive there was for this body to be used by the devolved Administrations. It is not intended to stir up wars between the devolved parts of the UK and the centre, but my view is that, by its set-up, it is likely to stoke rather than resolve concerns.

As I said before, the noble Lord does not like looking to the EU for examples, but it is a bit like when the Commission comes out with a proposal. It always wants to harmonise everything to make it easier and then the member states, notably the UK, get stuck in. You then get down to the nitty-gritty and you solve it. At the moment, we have this sort of overview coming from the Government that gives the devolved Administrations no room to manoeuvre—yet, when they get down to the nitty-gritty in the common frameworks, what happens? You can reach a conclusion.

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Lord Callanan Portrait Lord Callanan (Con)
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Not if the noble Baroness has withdrawn her opposition.

Clause 30 agreed.
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Lord Callanan Portrait Lord Callanan (Con)
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I thank noble Lords who have taken part. They have asked for a lot of information on the various clauses and whether they should stand part, and I will provide it.

I start with Clauses 31 to 37 and why they should stand part. As we have discussed previously, Part 4 of the Bill creates the office for the internal market within the CMA, charged with carrying out a set of independent advisory, monitoring and reporting functions to support the effective operation of the UK internal market. Clause 31 defines a regulatory provision for the purposes of the CMA’s UK internal market reporting, advisory and monitoring functions, as well as stating which of these provisions are within scope. The purpose is to establish that the CMA may undertake monitoring reviews on an ad hoc basis, either of its own volition or at the request of other parties, including the UK Government and the devolved Administrations and legislatures. This monitoring will focus on cross-border competition, investment and trade, as well as access to goods and services.

There are two categories of monitoring and reporting that the CMA must undertake. The first is an annual health of the market assessment that will set out trends and developments in the internal market, including levels of integration across different sectors and nations. The second is a review of the impact of the measures in Parts 1 to 3 of the Bill, dealing with the internal market system itself, to be published at least every five years. Both types of report will be published and laid before both Houses and all the devolved legislatures.

Clause 32 sets out the provision for the CMA to advise on a regulatory proposal prior to it being passed or made in law. If an Administration in one part of the UK wishes to do so, it may request non-binding advice from the CMA on an approach to regulation it or any other person proposes to make in the relevant part of the UK. This is on a voluntary basis but will help support effective policy development. The advice, or report, from the CMA will examine the potential economic impact of the proposal on areas such as competition and trade distortions, the impact on prices and the choice and quality of goods and services for consumers. To ensure transparency, all advice will be published and shared with all four Administrations.

Clause 33 details the CMA’s reporting procedure on regulatory provisions already been passed or made in law. The request may be made by one or more Administrations and must concern a regulatory provision applying to its part of the UK and within its legislative competence. Similarly, to ensure transparency, the CMA will publish the report soon after it is provided to the requesting Administration. The noble Baroness, Lady Bowles, asked about this clause. The clause sets out that it is for the national authority seeking the report from the OIM to consider and determine whether another body could provide advice. This is not a technical term and is simply intended to make it clear that the OIM is not intended to displace other bodies that might in theory provide more relevant advice on the same matter and, in doing so, make the best possible use of public funds.

Clause 34 sets out the reporting procedure that the CMA will undertake for regulatory provisions that are already enacted in any part of the United Kingdom and are considered to have actual or anticipated detrimental impacts on the internal market. The CMA may produce reports upon the request of a Minister in the UK Government or a Minister in any devolved Administration. The CMA must provide copies to all other Administrations in other parts of the United Kingdom, laying the report before each House of Parliament and all devolved legislatures, as well as making it public.

Clause 35 sets out the process that the CMA, the UK Government and the devolved Administrations must follow once a report has been produced by the CMA and laid before the legislatures under Clause 32. The process requires the Minister in the Administration responsible for implementing the regulatory provision that was the subject of the report, and the Minister in the Administration who requested the report, to make a Written Statement in their relevant legislature. This supports effective parliamentary oversight, as well as prompting legislatures to determine the most appropriate subsequent course of action.

Clause 36 allows the CMA the discretion to exclude particular categories of information from its reporting on impacts on the internal market. The discretion to exclude some categories is not novel or contentious, and is used by public and private organisations to protect commercial and private information about an organisation or a person. This discretion is necessary in specific circumstances to provide assurances for business and individuals’ interests.

Clause 37 requires the CMA to publish general advice, information and guidance about how it expects to approach the exercise of its monitoring, advisory and reporting functions under Clauses 31 to 34. This mirrors existing requirements in the Enterprise Act 2002 to publish documents, as the UK’s competition authority, on how it works to promote competition for the benefit of consumers, both within and outside the UK.

I turn to Amendment 134, which seeks to delete the phrase “from time to time” from Clause 31(1), which deals with the CMA’s ability to produce ad hoc reports on matters it considers relevant to the effective operation of the UK’s internal market. The Government agree that it is essential for the CMA to undertake reviews and report on matters it considers relevant to the effective operation of the internal market. However, the Government believe that it is also important that, as an independent body, the CMA should not be under pressure to frequently produce ad hoc reports, which is what removing this phrase “from time to time” would imply. As Clause 31(5) and (6) make clear, the office for the internal market will produce regular reports on the health of the internal market; it will therefore be well placed to make the right judgment on the need for the production of other reports.

Amendments 135 and 137 would require the CMA to conduct reviews only into what are called “important” matters, and that only the UK Government and devolved Administrations may request a review from the CMA. The Government appreciate the intention of these amendments, which is to ensure that the CMA is not overburdened by expectations in relation to reviews. However, the CMA is experienced in the matter of reviews and should not have its work impeded due to debates as to what constitutes a “matter of importance”. Furthermore, it is important that all stakeholders with an interest in the internal market should be able to request that the CMA undertake a review. This in turn will help to maintain stakeholder confidence in the independence of the OIM from the UK Government and the devolved Administrations.

Amendment 144 seeks to amend Clause 32 by inserting the word “entirety” to ensure that the Secretary of State can request advice and a report from the CMA on matters relating to the whole of the UK, not just a part of it. The current wording of Clause 32 aims to capture that reporting made possible by the clause is limited only to devolved regulatory competence. In the case of the Secretary of State, this would mean England-only legislation by the UK Government would be in scope of Clause 32. The effect of the amendment would be to extend the scope of Clause 32 to capture powers being exercised for the whole of the UK by the UK Government. To support the effective operation of the internal market, the office will need to focus its reporting and monitoring on areas of regulatory divergence across the UK. If regulatory measures apply UK-wide, the same risks to the functioning of the internal market will not feature. It is therefore vital to narrow the focus of the reporting in question to regulation that covers only a proportion of the UK and could pose an issue to the functioning of the market.

I turn to Amendment 145. The purpose of Clause 33 is to enable the CMA to produce reports on the impact of regulatory provisions which have already been passed or made into law. This procedure is voluntary and can be requested by an Administration, solely or jointly, in all parts of the United Kingdom, in relation to a regulatory provision applying to the relevant part of the UK and within its legislative competence. The Government understand the concerns around transparency, but the aim of subsection (2) is to ensure that the requesting Administration consider whether any other person or body is also qualified to provide an independent report on the matter before a request to the CMA is made. It is important to consider whether any work done by another person or organisation would put the CMA in a better position to provide advice to an Administration and for this to be taken into account and considered before a request to the CMA. This is a pragmatic and wholly sensible approach and ensures that the CMA’s resources are best directed at requests for advice, monitoring and reporting where it has the relevant expertise.

Amendment 146 advocates for the removal of subsection (4) within Clause 35. This clause requires the national authority responsible for implementing the regulatory measure that was the subject of the CMA’s report to then make a written statement in the relevant legislature. This amendment would remove the obligation of laying a copy of a written statement before each House of the UK Parliament. This would clearly result in inconsistency between the UK Government and devolved Administrations in accountability to their respective legislatures. We believe that this change would result in a democratic deficit and the loss of accountability towards both Houses of this Parliament.

Amendments 147 and 148 would require the CMA to consult stakeholders before preparing advice and information about how it expects to approach the exercise of its functions and revising or withdrawing any advice or guidance. Clause 37 mirrors existing requirements in the Enterprise Act 2002 to publish documents, as the UK’s competition authority, on how it works to promote competition for the benefit of consumers, both within and outside the UK. As a matter of good practice and maintaining effective working relationships with a range of stakeholders, the CMA already undertakes extensive consultations with stakeholders in respect of its existing statutory duties before publishing advice and information. The CMA will be maintaining this approach in respect of the advice, information and guidance it publishes under Clause 37. In light of this reassurance, and to safeguard the independence of the CMA, the Government do not think it is necessary to compel the CMA to do this, as proposed by the amendment.

Amendment 151 seeks to amend Clause 39 to explicitly require the CMA to consult the UK Government, the devolved Administrations and other relevant persons in preparing or revising its statement of policy in relation to the enforcement of its information-gathering powers. Clause 39 allows the Competition and Markets Authority to take actions in response to non-compliance with the information requests described in Clause 38. To ensure that its penalties regime is fully considered and proportionate, the CMA will be required, as it already is now under its existing statutory functions in relation to the Enterprise and Regulatory Reform Act 2013, to consult other parties as it sees fit when developing or revising its approach. I can assure noble Lords that, in practice, the UK Government and the devolved Administrations would always be consulted as a duty on the CMA as it stands in the Bill. The noble Baroness, Lady Finlay, asked about compelling devolved Administration Ministers to give information. We can give DAs information notices, but they cannot, of course, receive any penalties for non-compliance.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, it will be interesting to hear how the Minister responds to this request, which has been well described as a bit of a coda. On the other hand, it also contains teeth, which would be there to be used, if someone wished to. It is important to get this right and understand, if it is rejected, why it is. I look forward to that.

Ministers know that we on the Labour side think that the common frameworks are at the centre of the managed divergence that we want to see and allow to happen across the devolved Administrations. It is important that the process continues and that is at the centre of the Bill, because it is not at the moment; it is hardly mentioned, except in passing. If that is the case, we look for some additional reassurance from the Minister that the powers that might be available to the Government, when they feel the common frameworks are not working, are not used too early or vicariously just to show the devolved Administrations who is in charge. As we were reminded by the noble Lord, Lord Dunlop, on day one, the Government already have powers to deal with any default they feel is present in the common frameworks. The questions raised by this amendment are important, and I look forward to hearing the Minister’s response.

Lord Callanan Portrait Lord Callanan (Con)
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I thank those hardy souls who have stayed for this brief debate. Amendment 143, tabled by the noble Baroness, Lady Finlay, is concerned with a proposed role for the CMA in the laying of regulations on the application of the market access principles. It builds on the earlier Amendments 6, 78 and 104, which concerned the scope within which the UK market access principles proposed in the Bill will apply. I understand that the noble Baroness has tabled this amendment on behalf of the Welsh Government, and I thank the Welsh Government for their positive engagement on the Bill so far. The UK Government look forward to continued and constructive future engagement with them on more aspects of these proposals.

Before I turn to the detail of this amendment, I note the previous discussion on similar amendments also tabled by the noble Baroness, Lady Finlay, which would have narrowed the scope of the market access principles. As I set out then, those amendments would, in combination, prevent the market access principles from applying in time, at the end of the transition period. Earlier, I set out that the lengthy process the amendments put in place before the principles can apply, including the need to exhaust the framework discussions first, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Amendment 143 would add an additional layer of bureaucracy to that process.

In our view, it would also problematically risk bringing the CMA into potentially contentious decision-making and mean its role was weighted towards supporting the Secretary of State over the devolved Administration counterparts. This contrasts sharply with our vision for this, which is to ensure that the OIM’s expert reporting is available to all four administrations equally. Above all, however, the advice provided by the OIM will be economic in nature. Its panel will have expertise across intra-UK trade, regulatory impacts on business and competition effects, which is one reason why the Government chose to establish it within the CMA. We had that debate earlier.

The office for the internal market will not be equipped, therefore, to opine on matters related to animal welfare or environmental protection. To lay this obligation on the OIM would bring a significant risk of duplication of the remit of other public bodies, which would cause considerable confusion for the many stakeholders in this field. For these reasons, and the uncertainty and confusion that this and other related amendments would generate for businesses and citizens, the Government regretfully cannot support them, and I hope the noble Baroness is able to withdraw.

Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB) [V]
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My Lords, I am grateful to the Minister for recognising the staying power of some noble Lords, because we have had three days of this debate. I am most grateful to the noble Lord, Lord Fox, for going through some of the aspects of this amendment in more detail and clearly pointing out that its aim is to establish a level playing field, at every level. There has to be a level playing field, because it is the only way in which the four nations will eventually be able to work together properly.

I echo the words of the noble Lord, Lord Stevenson, and I am grateful to him for stating that there is a need to have common frameworks at the centre of the Bill. This is something to which we will return on Report, because the Bill, as it is written, does not make this clear at all. In the way it is written at the moment, it looks as if the common frameworks are almost disposable. We need to come back to that.

I am glad that the Government recognise the involvement and commitment of the Welsh Government to have positive discussions, and I know that from the Wales end that that is true. They want to engage and come to a good solution. They want business certainty just as much as anyone else; they want less bureaucracy just as much as anybody else, but they need to know there will be a level playing field and fairness at the end of the day. That is why the common frameworks were so attractive, and why people have worked so hard towards them and are committed to carrying on working towards them.

Having said that and knowing that we need to have further discussions on this and that we will return to this on Report, I beg leave to withdraw the amendment.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

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Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th November 2020

(3 years, 4 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 135-V Fifth Marshalled list for Committee - (4 Nov 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, this debate has raised some interesting and important issues. I have listened with care to all the speakers and particularly to the contribution of the noble Baroness, Lady McIntosh, based on information provided by the Scottish Law Commission, whose help I also acknowledge. I look forward to the Minister’s response. The noble Baroness, Lady Bowles of Berkhamsted, raised a number of issues to which I wish to return. Other speakers have made small but important points on SMEs and the role of Northern Ireland.

The noble Lord, Lord Fox, picked up on the recent letter from Ministers about university fees, particularly in Scotland, and questioned whether this could constitute indirect discrimination. This was also raised in an earlier group. Like the noble Lord, I wonder why this could not be better dealt with by the common frameworks approach. This should be applied to all aspects of managed divergence, in relation not just to goods but also to services and the regulation of professions. We will return to this on Report.

In respect of the amendments tabled by the noble Baroness, Lady Bowles of Berkhamsted, the powers included in Clauses 38,39 and 40 are quite extensive and detailed. Do they go beyond the existing powers of the CMA? Are they new because of the responsibilities that will accrue to the CMA or the office for the internal market under this Bill? Or do they simply repeat existing powers reframed in some way to suit the new circumstances? I would appreciate the Minister’s response. As other speakers have said, this additional activity is very detailed and gives specific examples of what can and cannot be done and how it is to operate. Does this not play to the concerns raised by the noble Baroness, Lady Noakes, in an earlier amendment that asking the CMA to extend its focus and the range of its work might blur the good work it does at the moment? Does the Minister accept that there might be a problem here?

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, I thank all noble Lords who have taken part in this debate. The noble Lord, Lord Fox, raised issues around university tuition fees and water services. As he said, I have written to him and to the noble Lord, Lord Purvis, about the points they raised in earlier debates. I am told that these letters have been submitted to the Library but there may be a slight delay in their publication. I confirm what I said there about the exemption in the legislation for public services. More details are set out in the letters. If for some reason they have not yet been published, the noble Lords, Lord Fox and Lord Purvis, should get in touch with my office, which will be happy to furnish them with a copy.

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Lord Fox Portrait Lord Fox (LD)
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I much appreciate the Minister’s answer. The questions I asked about university tuition fees were in the light of having read his letter, which my noble friend Lord Purvis made available to me—there is no need to send it to me. In it the Minister states that,

“we are aware of the questions raised in relation to university services and how they may interact with the Bill”,

which is good. The letter continues:

“We have the power to amend the exclusions Schedule and will keep the area of higher education under close review.”


It therefore seems that the Government are planning to do that after Report. My point is that it would be a boon to our process on the Bill if the Government were to consult before Report and come back with something that I am sure, given what the Minister said, would merely fulfil their ambition for the Bill while settling concerns in the university sector.

Lord Callanan Portrait Lord Callanan (Con)
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I thought that I had put the matter to rest by writing the letter to the noble Lord, Lord Purvis, on which the noble Lord, Lord Fox, has commented. In our view, there is no doubt that the regulation of tuition fees is outside the scope of the Bill and, therefore, beyond the scope of the office for the internal market’s functions. But as the letter to him confirmed, we will keep the matter under review and not hesitate to take action if there is a problem, which we do not believe exists.

Baroness Henig Portrait The Deputy Chairman of Committees (Baroness Henig) (Lab)
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The noble Lord, Lord Stevenson, and the noble Baroness, Lady Neville-Rolfe, also wish to speak after the Minister.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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I asked the Minister a specific question on whether the framing of Clauses 38 to 40 was exactly the same, or differed from, the existing powers of the CMA. He did not answer that. I do not want to delay us too much today but perhaps he could write to me about it.

Lord Callanan Portrait Lord Callanan (Con)
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I would be happy to write to the noble Lord but, as I said, the powers to date have functioned effectively and are based on the CMA’s existing powers.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
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I have another couple of points for clarification by my noble friend. First, does legal privilege apply to in-house counsel, provided that they are properly qualified lawyers? I would be happy for the Minister to write to me about that. Secondly, he referred in the debate about small business to Clause 32(4), and helpfully explained that the CMA will advise on regulatory proposals before laws are made, which provides an opportunity for small business interests to be taken into account. However, my concern was also about enforcement of the law, which would bear particularly harshly on small businesses that do not have the same fancy legal departments as others. I am not sure that the clause deals with that but would be delighted if I was wrong.

Lord Callanan Portrait Lord Callanan (Con)
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On my noble friend’s first question, she will notice that Clause 38(8) states:

“A notice under subsection (2) or (3) may not require a person … to produce or provide any document or information which the person could not be compelled to produce, or give in evidence, in civil proceedings before the court”.


I hope that that resolves the matter. I will write to her on her second point.

Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con)
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I thank everyone who has contributed, including my noble friend the Minister in summing up the debate. We had an excellent discussion on the issues, and I am grateful to the noble Baroness, Lady Bowles, for raising them because they are pertinent. I am slightly confused as to why it is necessary to include in the Bill powers that already exist. We are told that they are not new, yet my noble friend will not agree to include in the Bill a matter that is already causing alarm.

I am grateful to the noble Baroness, Lady Ritchie, for alerting me to the Constitution Committee report in that regard. It has highlighted its concern and received a verbal undertaking from the Lord Chancellor. I should repeat that we are referring to the Law Society of Scotland, not the Scottish Law Commission. If both the committee of this House and the Law Society of Scotland are concerned, that verbal reassurance is not enough. I may well reflect on the matter and come back on Report. However, for the moment, I am grateful for having had the opportunity to debate this matter and I beg leave to withdraw the amendment.

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Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, this debate is perhaps even more important than some of the others that we have had. The real advantage of a stand part debate is that one can question the purpose of a clause rather than getting down into the weeds of amendments.

The issue that the noble Baroness, Lady Bowles, has raised is fundamental to how we have been looking at this. She asked—these are actually my words, although the noble Baroness, Lady Neville-Rolfe, said much the same—whether the competition regime was appropriate for work on the internal market. I am sorry that the noble Lord, Lord Callanan, gave away in an earlier debate that this may have been written hastily over the summer; it certainly sounds like a cut-and-paste job, done without stopping to think. Just because it is the same organisation at the same address in Holborn, or wherever the CMA is these days, you cannot just cut and paste it; as the noble Lord, Lord Fox, was saying, it is about the culture of that organisation as well as whether the structure is available. There is a fundamental question here, which my noble friend Lord Stevenson dealt with under Amendment 115, of whether the OIM should be within this framework, as well as the even broader subject of whether these sorts of penalties are appropriate for such a different role.

There are some specific issues in these clauses, such as whether it is appropriate for the Government to be able to amend the list of exclusions without any involvement of the devolved authorities. We have discussed such matters before, but under this legislation the fixing of penalties could again be altered without any involvement of the devolved authorities. This is serious stuff. They are a part of the overall governance and working of the new internal market, yet the Bill is written as if this is simply a Westminster responsibility.

I come to what the noble Baroness, Lady Neville-Rolfe, was saying: exactly what is covered by these clauses? In an earlier debate I asked the Minister to set out what services were covered, but obviously I was mumbling at the time because he wrote me a very nice letter on 2 November telling me about the services that are excluded, which of course already exist in the Bill. The question that I was trying to ask is: what services will be covered? I still cannot get a handle on that. This is really important given what has been said about whether the demands and penalties applying to services that are covered are appropriate.

Obviously I was not very clear about what I wanted but I had talked about housing and whether someone organising a register of housing would count as a service. I was talking about landlords but the letter refers to social housing. We are talking not about social housing but about landlords of private housing. I am involved with another part of the Government, the Ministry of Housing, Communities and Local Government, in chairing something to try to set up a code for property agents for when the Government are ready to fulfil what they have already promised—that is, to set up a regulator of property agents. They are already a service but the circumstances are different—buying and selling a house in Scotland is very different from England; if you buy there, you tend to go to a solicitor rather than an estate agent—so there are different ways of a service being developed or in existence. Once they are regulated, perhaps property agents will count as a profession, which is a different issue, but before then, as a service, are they going to be covered by these sorts of requirements?

If that is the case—and this is the main thrust of what I want to say on this group— how will these services know that they are covered by this provision? It is important for anyone risking breaking the law, in the sense of civil law, and being charged a penalty to know that that law applies to them. If they do not define what they are doing as a service and therefore do not know that they are captured by this provision, they may find it difficult to understand that they could be required to provide information. I can imagine that this could really affect property agencies. They need to know that it covers them, which is quite an issue, but it is also unclear to me whether the level of penalties is appropriate for this area. For a small housing management group, for example, this daily rate of £15,000 will basically wipe out its business if it has an £80,000 annual turnover. We are talking about levels of penalty.

It seems to me that those agents are covered by this, but I am unclear about the appeals process. If they are asked a question, how do they know that it has legal force behind it? Even if they are told that—most of these people will of course not have lawyers —and there is a penalty, do they have any appeal? I could not find one in the Bill but I am sure the Minister will be able to tell me; it is quite unusual to have a penalty without any sort of appeal. I could not work this out but I am sure the Minister will.

My main ask is: can we know the sort of services that will be covered? Perhaps we could hear more—not in legal language but in language that I can understand—about how they would know and about their rights to appeal any fixed penalty.

Lord Callanan Portrait Lord Callanan (Con)
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I thank all noble Lords who have taken part in this debate. I apologise to the noble Baroness, Lady Hayter, if she found my letter disappointing; I will try to do better next time. The noble and learned Lord, Lord Falconer, looks disapproving; I am not going to write him any more letters if that is the case.

With regard to exclusions on services, all services subject to the authorisation requirements or the regulatory requirements are affected under the Bill unless they are specifically excluded from some or part of the rules under Part 2. I hope that that clarifies the noble Baroness’s question—if not, I will be happy to write her another letter. She is shaking her head in disbelief.

I say to the noble Baroness, Lady Bowles, with regard to her question on consultation, that we consulted on the general office, what enforcement provisions there should be and whether or not it should be included as part of an arm’s-length body. Once we had made the decision that it should be located within the CMA, there was of course extensive discussion between officials and the CMA on the powers and how they will be enforced. I say to my noble friend Lord Tyrie that I am of course aware of the proposals that he refers to on the CMA and I will be happy to take another look at them.

Addressing the specific questions on this clause stand part debate, I will set out the rationale for these clauses. Clause 38, as I believe we already discussed in the previous group, sets out the powers that the Competition and Markets Authority will have to gather information in support of its monitoring, advisory and reporting functions. As I said previously, in order to carry out its functions the OIM must have access to high-quality information to produce accurate, relevant and credible reports. Clause 38 will ensure that the CMA is able to require the assistance of third parties to perform its functions and is able to independently gather evidence in a timely manner.

I hope that the noble Baroness, Lady Bowles, agrees with me that presenting analysis based on partial or inaccurate information could be detrimental to the regulatory decisions taken as a result of OIM reporting and monitoring and would damage the reputation of the OIM among many key stakeholders in these fields. The powers in this clause are therefore put on a strong statutory footing. They will ensure that the reporting that the OIM undertakes will be as effective and comprehensive as possible for the benefit of policy-makers in the UK Government and the devolved Administrations, significantly strengthening existing stakeholders’ ability to navigate the new UK internal market.

Clause 39 describes what action the CMA is able to take in response to non-compliance with the information requests described in Clause 38. As noble Lords said, the CMA has existing powers under the Enterprise Act 2002 regarding non-compliance with its information requests. This is necessary to enable the CMA to carry out its functions effectively. As with Clause 38, the provision for the OIM in Clause 39 is modelled on those powers. The clause will allow the CMA to determine the most appropriate policy approach and the amount of any financial penalty to be imposed within the limits that have been prescribed. The clause also sets out the conditions where financial penalties may not be imposed because more than four weeks has expired since the CMA exercised its relevant functions.

Clause 40 sets the parameters that the CMA should consider for financial penalties in cases of non-compliance with an information-gathering request notice. Let me first say that I understand the concerns of noble Lords, but the preference and expectation will always be that information gathering is on a voluntary basis. The Government do not anticipate that the CMA will need regularly to fall back on the information-gathering and non-compliance powers. However, it is important to ensure that this facility is available to the CMA to detail how penalties will be set. As with other provisions, the Government have chosen to mirror the relevant provisions of the Enterprise Act 2002.

I can say to the noble Lord, Lord Tyrie, and my noble friend Lady Neville-Rolfe that the Secretary of State will make regulations specifying the maximum amounts in practice within the specified ceilings for these penalties in consultation with the CMA and other interested parties. I can confirm for the benefit of the noble Baroness, Lady Hayter, that the devolved Administrations will of course be consulted as part of this. In addition, and as noted in our debates on previous groups, I confirm to the noble Baroness, Lady Bowles, and the noble Lord, Lord Tyrie, that the CMA will not be able to issue a financial penalty against the UK Government or any devolved Government. Let me be very clear about that. Let me also assure the noble Baroness, Lady Bowles, that the Government are committed to not taking any steps to bring in the financial penalties until there is credible evidence that there is a need do so, so we will not commence these provisions without that credible need being demonstrated.

I will deal with a couple of other questions. The noble Baroness, Lady Bowles, asked about third-party requests. Such requests would be permissible if they were within the scope of Clause 31 and the CMA thought that they were appropriate. As I confirmed earlier, the White Paper invited consultation responses on how the functions to be delivered should be implemented as well as on whether an existing arm’s-length body should deliver them or bespoke arrangements should be established. As is obvious, we decided after that consultation that the OIM should be situated within the CMA.

With the reasons I have set out, I hope that I have been able to reassure noble Lords on their legitimate concerns and on why this clause should stand part of the Bill. I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Henig Portrait The Deputy Chairman of Committees (Baroness Henig) (Lab)
- Hansard - - - Excerpts

I have had a request to speak after the Minister from the noble Lord, Lord Fox.

--- Later in debate ---
Lord Callanan Portrait Lord Callanan (Con)
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With regard to the noble Lord’s first question, I understand why his cleaning abilities might not be up to standard and he might not get his tea. With regard to the questions asked by the noble Baroness, Lady Bowles, on reasonableness, we certainly do not intend to create disparity within the CMA over the functions it carries out and the processes it follows.

To be serious, of course I understand the difference between being asked to do something voluntarily and being asked to do something voluntarily with the back-up of potential penalties. The powers and penalties in question are similar to those used by the CMA for its existing functions, such as conducting market studies. This will ensure consistency in the way that the CMA, under its existing and its OIM capacities, interacts with stakeholders across all its functions. We do not intend to commence the powers on fines until it is proved that they are necessary, as I said.

Baroness Henig Portrait The Deputy Chairman of Committees (Baroness Henig) (Lab)
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I have had a request to speak from the noble Baroness, Lady Neville-Rolfe.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
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I thank my noble friend for his assurance on commencement. He did not answer my specific questions, but I think that the answer in general terms was that the Government have taken the same powers as the CMA has on competition and applied them pro rata. Perhaps I can pick up something that the noble Lord, Lord Stevenson, said earlier. I wonder whether we could look at this line by line to see whether things are or are not all the same; that would be a helpful Committee-type process.

I really got up to ask a question about examples. The Minister helpfully gave an example of a penalty regulation—he said that he might make regulations with penalties under £30,000, perhaps at a lower level for particular things—but I am confused about what kind of regulations are going to be made here. That may be an impossible question to answer but if my noble friend could give us some more examples, perhaps ones that are in draft or have gone out to consultation, it would be incredibly helpful.

Lord Callanan Portrait Lord Callanan (Con)
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I referred in my earlier speech to the need to make regulations setting the maximum penalty, which the Secretary of State will do, but I will write to my noble friend if there are any other examples of regulations that we feel we may need to make.

Baroness Henig Portrait The Deputy Chairman of Committees (Baroness Henig) (Lab)
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Does the noble Baroness, Lady Bowles, wish to respond to any of the points made?

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Lord Fox Portrait Lord Fox (LD)
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My Lords, at the outset I should say that, because of my past but discontinued interests, I will not be speaking to the specifics of the example that the noble Baroness, Lady Hayter, brought up; rather, I will speak generally on this issue.

I speak to support the spirit of this amendment. It is a shame that the noble Lord, Lord Tyrie, is not still here because I would have welcomed his view on this issue. As the noble Baroness, Lady Neville-Rolfe, said, there are examples of Secretaries of State who wanted to do more but were constrained, and Cadbury is a good example of that.

However, after two dozen or more hours in Committee, I find myself at last coming to agree with something that the noble Lord, Lord Naseby, said, and that is that this issue goes wider than simply the nature of the Bill. The noble Baroness, Lady Neville-Rolfe, said the same thing. It is an important issue, so we should be thankful that the noble Baroness, Lady Hayter, has brought it up. It is clearly inadequate; the Secretary of State needs a better armoury to assess the public interest and deal with what will undoubtedly be, as the noble Lord, Lord Naseby, said, a flood of potential acquisitions and hostile takeovers.

This may not be the right Bill to be doing it in, but it is a big issue. That said, it also opens up the question of how the new office for the internal market relates to the Secretary of State and the CMA when it is dealing with a hostile takeover that the Secretary of State has called in. As the Bill stands now, allowing for the fact that the Minister may not accept the amendment, how do the Government envision the interactivity between the office for the internal market, the CMA and a hostile takeover bid that the Secretary of State has called in? Who does what, and where?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank the noble Baroness, Lady Hayter, for her amendment. I understand her concerns but, as I am sure she is aware, the internal market Bill is concerned with protecting the flow of goods and services across the UK after the end of the transition period. It is not concerned with the general merger regime, nor with Ministers’ powers to intervene in mergers. Noble Lords should be aware that they will have the opportunity to debate these matters further in the Government’s forthcoming national security and investment Bill.

None Portrait A noble Lord
- Hansard -

Will that be soon?

Lord Callanan Portrait Lord Callanan (Con)
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It is forthcoming. Noble Lords will know that I cannot go further in terms of dates. It was flagged up in the Queen’s Speech and is forthcoming.

The grounds for ministerial intervention in mergers are deliberately precise and limited, in order to maximise transparency and predictability for businesses. The effect of the amendment would be to broaden the grounds upon which Ministers may make a public interest intervention in mergers. This would constitute a significant change to the UK’s approach to merger control which, as noble Lords observed, currently puts the emphasis on competition-based assessments by the Competition and Markets Authority, with narrow and specific grounds for ministerial intervention.

It is not clear how such a change would materially assist with the effective operation of the UK internal market which is, of course, the focus of this part of the Bill. The CMA already has significant powers and expertise to investigate the benefits and risks of mergers in relation to competition. An excessively broad power to intervene in the affairs of investors, shareholders and company boards risks stifling competition, innovation and creativity. This could lead to worse outcomes for both businesses and consumers, as well as stifling inward investment. For these reasons, I cannot accept the amendment and hope that the noble Baroness will withdraw it.

Before I sit down, I will answer the other question which the noble Baroness asked about the previous group. The power for the Secretary of State to specify the maximum penalties for breach of information-gathering notices will be brought in by negative SI. This mirrors Section 111(4) of the Enterprise Act 2002.

Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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The Minister is very polite. What he really wanted to say to me was: “Nice try”. There is a serious point here. As I said in my introduction, I know that the basic power is outwith the scope of this Bill, but there is some urgency to this question. The noble Baroness, Lady Ritchie, used the words “greater protections are needed against hostile takeovers”. They may not be exclusively from outwith the UK, but those are some of the ones where there have been particular problems. I think it is agreed that, as the noble Baroness, Lady Neville-Rolfe, said, there is a weakness in our armour because you cannot argue against them on the grounds of competition. I thank the noble Lord, Lord Naseby. The problem is that it is not within the tools of the CMA. It cannot use as a ground the need to either respond to public policy or promote particular industries. If it does not affect competition, it is not within its powers.

This does need to be added. The noble Lord, Lord Fox, is right that this is perhaps not quite the right mechanism, but we are delighted to know that there is a Bill coming and I look forward to the Minister accepting an equivalent to Amendment 153 at that point. I will, needless to say, use today’s Hansard to support that amendment to get this in then. I look forward to the noble Lord, Lord Naseby, and other noble Lords supporting me at that time.

I wanted to table the amendment to this Bill because of the changes there will be when we have got the internal market growing and we are looking for new investments. Even those who think everything is going to be wonderful after Brexit know that we are going to need a lot of support to get the economy going again after Covid. There is a slight weakness, so it would have been nice to have been able to put this clause in at this point. It was a nice try, but I beg leave to withdraw the amendment.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

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

(3 years, 4 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 135-V Fifth Marshalled list for Committee - (4 Nov 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Lord Falconer of Thoroton Portrait Lord Falconer of Thoroton (Lab)
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Anybody who says there is no debate in this place because we are complying with the coronavirus rules is very misguided and rather cross.

The third line of defence comes from the noble Baronesses, Lady Neville-Rolfe and Lady Noakes. They say, “This is just a sensible protective measure. Suppose there was to be a breach subsequently: here we are—it is in place”. I have no sympathy with that view at all, for two reasons. First, there is not a sliver of evidence that the European Union is not acting in good faith. One would have expected it to have been produced by the Government if that was the case. Secondly, the points that both noble Baronesses relied on are not covered by the terms of the internal market Bill. The at-risk provisions, for example, are not available to the Government to correct by the terms of the internal market Bill. There was a reference to the fact that they might be covered subsequently by the Finance Bill but, as the noble Baronesses know, there is to be no Finance Bill this year. Their defence has no foundation in fact.

I really hope the Government see sense quickly. This part of the Bill is the most massive own goal, but it is much more than simply the operational aspects. At its heart, this Bill breaks faith with one of the most fundamental parts of our constitution: the rule of law. It is not just the appalling position it leaves us in in the world; it is what it says about us, the United Kingdom. I proudly defend and believe in the values of my country. The rule of law protects each one of us, rich or poor, strong or weak, from all forms of oppression. We should not be, to use the words of the noble and learned Lord, Lord Judge, “complicit or supine” in this toxic, casual, un-thought out, arrogant abandonment of our values. We should vote against every one of those vile clauses in Part 5 tonight and, if necessary, again and again, to persuade the Government that this should never become part of our law.

Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
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My Lords, I too begin by humbly paying my own tribute to Lord Sacks. His reflective witness to faith was, and will remain, an inspiration to very many people he never knew.

As your Lordships are unusually, as I understand it, intending to terminate all discussion on these clauses in Committee; and as some, including the noble and learned Lord, Lord Falconer, opposite have somewhat brazenly—some people in the other place may consider—stated that this House may not be prepared to consider them again if invited to do so; and as, unusually for your Lordships’ House, some of these clauses have not been considered in detail, your Lordships must forgive me if I take some time to explain the rationale. I would, of course, like to thank all those who have contributed to the debate; although I agreed with the minority rather than the majority, I have listened carefully to them all and respected them all.

Lest there be doubt, let me put it beyond peradventure. The United Kingdom has stood, does stand and will stand behind the Belfast/Good Friday agreement. Nothing in this Bill is conceived to undermine that agreement. The United Kingdom Government intend no change to the status of Northern Ireland. The United Kingdom Government will never seek or support a hard border on the island of Ireland.

Equally, the United Kingdom Government will never accept that a foreign power, in the form of the EU, could unduly disrupt the free movement of goods within the United Kingdom’s customs territory. It is solely and specifically against such an unwanted, disproportionate and unnecessary potential intervention that the parts of this Bill, to which so many of your Lordships object, are designed. They are designed, as the minority of speakers in this debate—who were listed by the noble and learned Lord, Lord Falconer—have noticed, to protect east-west links, with full respect for the interests of the EU to maintain its single market, and designed to protect the basis of the Belfast agreement.

There has been significant and robust debate about Part 5, both in this House and the other place, ended with an extremely robust statement by the noble and learned Lord, Lord Falconer. The debate has focused predominately on the safety net or backstop provisions in Clauses 44, 45 and 47. However, Part 5 of the Bill contains crucial provisions which are not safety net provisions but protections that we want to apply in all eventualities. These provisions safeguard Northern Ireland’s place in the United Kingdom’s customs territory and legislate for unfettered access for Northern Ireland goods to the rest of the UK market, which is clearly provided for under the protocol. They also codify in legislation the existing practice where state aid is notified to the European Commission by the Foreign Secretary via the UK mission in Brussels.

I understand that some noble Lords intend to divide the House to remove the whole of Part 5, and the noble and learned Lord, Lord Judge, made that clear today. However, if we go to a Division, there will be at least two groups with different issues. As your Lordships consider your votes, I urge each of your Lordships to consider each clause on its merits, and consider the signal that striking each out might send to the people of Northern Ireland. I listened carefully to what the noble and learned Lord, Lord Judge, said, and I could not hear a case made for a link between Clauses 42 and 46 with what he sees as the offending clauses. I therefore do not see how they are dependent on one another.

As for Clause 43, I must disagree with the noble and learned Lord. I am clear that it stands entirely on its own as a means of safeguarding unfettered access to the UK market. This Government have repeatedly committed, and remain committed, to precluding checks or controls on qualifying Northern Ireland goods to the rest of the UK market. This is what the Northern Ireland Executive have asked for, what Northern Ireland businesses right across the spectrum from agri-food to manufacturing have asked for, and what the withdrawal agreement preserves and protects. Helping to give that effect is the sole purpose of Clause 43. It was not drafted to be interlocking or interdependent with any other clause in the Bill. If no other clause in this Bill were passed, the Bill would be able to function and stand alone as a means of protecting access for Northern Ireland businesses to—as we have heard—their most important market. To that end, while it does refer to Clause 47 in Clause 43(3)(b), that is only as part of spelling out that the clause in fact allows checks where applicable international obligations require them.

Given the broad support in Northern Ireland for unfettered access to their businesses’ most important market—and I hope that noble Lords have been listening to the speeches made by some of those who are here from Northern Ireland—it would be hugely disappointing for them and for businesses in Northern Ireland if noble Lords were to remove them unduly.

Before coming to the main argument, let me address briefly amendments in this group which would fall if the clauses in Part 5 are removed by your Lordships. First to fall will be Amendment 161, tabled by the noble and right reverend Lord, Lord Eames. I am grateful for having been able to discuss these issues with both the noble and right reverend Lord and the right reverend Primate. Their amendment would require the Secretary of State to publish a statement on the impact on peace and reconciliation in Northern Ireland before regulations on export declarations and other exit procedures under Clause 44 can be made. As I have just underlined, central to any exercise of those powers would be our aim to ensure that the political and economic integrity of our whole United Kingdom is maintained, and that the Belfast agreement and successor agreements and the gains of the peace process are protected in all potential circumstances.

Above all, I so agree with the most reverend Primate and the right reverend Prelate that we must ensure that the delicate balance between all communities in Northern Ireland is maintained and the UK Government pursue policies for sustained economic growth and stability in Northern Ireland—the best route to sustaining peace, as the noble Lord, Lord Morrow, just reminded us. The statement that these have always been, and will remain, the Government’s priorities applies to all clauses of this Bill, not just Clause 44. Therefore, the Government do not consider it is necessary for this further step to be introduced, but we fully appreciate and endorse the motives and concerns of the opposers so powerfully spoken to by the noble and right reverend Lord, Lord Eames.

Amendments 158 and 159, introduced by my noble friend Lord Callanan, would ensure that the UK Government and the devolved Administrations can continue, as they do now, to respond to serious threats to the health of people or animals, a principle already reflected in Schedule 1. I trust that the House will accept the principle of these important amendments to protect people and accept that they are necessary for the health and safety of us all. They will fall today if your Lordships remove Clause 43.

I turn to Amendments 162 and 163 in the name of the noble Lord, Lord Hain. The Government agree with the noble Lord’s aims, and I hope that I can provide reassurance that the Bill already provides the protection he seeks. We are unequivocally committed to delivering unfettered access for Northern Ireland goods to the UK market. The Bill, unless that protection is struck out by your Lordships today, prevents any new checks or controls on those goods, thus ensuring that Northern Ireland goods have unfettered access—and, of course, those goods will not be subject to tariffs.

We are also working with the Northern Ireland Executive and businesses to ensure the next phase of the regime, which will come into force during 2021, focuses benefits specifically on Northern Ireland business, again as the noble Lord, Lord Hain, and his supporters are asking. The amendment aims at much the same outcome as the Government does, but I submit that the benefit of our approach is that we can ensure unfettered access without burdensome requirements on business and do so as part of the regime that applies right across the United Kingdom.

On Amendment 163, again I recognise the noble Lord’s aims, but this amendment would risk tying the Government’s hands on how best to support businesses trading between Great Britain and Northern Ireland in future. The trader support service is, as the noble Lord’s amendment asks, free at the point of use and is part of the extensive programme to support businesses impacted by these new processes. While we have set out that it will be reviewed after two years, I assure the noble Lord, Lord Hain, and the noble Baroness, Lady Suttee, that this is by no means a guillotine on its operation. Legislating prior to review would not be best practice; circumstances will evolve, impacting the nature and best focus of any support that may be required. I hope that the points I have made provide assurance that these amendments are unnecessary. While we are ready for further engagement, I hope the noble Lord feels able not to press his amendment.

I turn to Amendments 179 and 180 in the name of my noble friend Lady McIntosh of Pickering, which seek to amend Clause 56 in Part 7 to ensure your Lordships’ House, as well as the other place, would be required to approve a Motion before Clauses 44, 45 and 47 can commence. The process provided for in Clause 56 operates in line with precedent that has been set in recent years for significant votes, such as the meaningful votes on the previous Prime Minister’s withdrawal agreement and votes on military action, such as the Syria vote in 2013. It ensures—and I hope my noble and learned friend Lord Clarke of Nottingham has read the Bill—that a mandate from the democratically elected House should be the basis for proceeding or not while respecting the important voice this place should have in a take-note Motion. That is the right balance, and I ask my noble friend not to press her amendments.

I return to the core of the debate: the view of many of your Lordships that Part 5, considered, amended, approved and sent to us by the elected House, has no place in this Bill. The Northern Ireland protocol is clear that Northern Ireland is part of the UK customs territory, and our manifesto was clear that we would

“maintain and strengthen the integrity and smooth operation of our internal market”.

Clause 42, which the noble and learned Lord, Lord Judge, declared “contaminated”, delivers on that commitment. The Bill requires that, when exercising functions relating to implementation of the protocol or movement of goods within the United Kingdom, all authorities must have special regard to three fundamental matters:

“the need to maintain Northern Ireland’s integral place in the United Kingdom’s internal market … the need to respect Northern Ireland’s place as part of the customs territory of the United Kingdom; and … the need to facilitate the free flow of goods between Great Britain and Northern Ireland”.

Article 6 of the Northern Ireland protocol states:

“Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom's internal market.”


This clause delivers on those provisions in the protocol, in our Command Paper in May and in the Government’s manifesto. I see no contamination; I see clarity. In my judgment, it would be a serious matter for your Lordships to remove it.

--- Later in debate ---
22:41

Division 2

Ayes: 165


Conservative: 147
Democratic Unionist Party: 5
Independent: 5
Crossbench: 4
Labour: 2
Ulster Unionist Party: 1
Liberal Democrat: 1

Noes: 433


Labour: 156
Crossbench: 116
Liberal Democrat: 80
Conservative: 44
Independent: 22
Bishops: 9
Green Party: 2
Plaid Cymru: 1

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
- Hansard - - - Excerpts

My Lords, the result is clear and we have already agreed in the usual channels that Clause 43 is consequential on Clause 42.

Clause 43: Unfettered access to UK internal market for Northern Ireland goods

--- Later in debate ---
22:57

Division 3

Ayes: 148


Conservative: 134
Democratic Unionist Party: 5
Independent: 5
Crossbench: 3
Liberal Democrat: 1

Noes: 407


Labour: 142
Crossbench: 119
Liberal Democrat: 76
Conservative: 38
Independent: 17
Bishops: 8
Green Party: 2
Ulster Unionist Party: 1
Plaid Cymru: 1

--- Later in debate ---
Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, I thank the noble Baroness, Lady Rawlings, for introducing her amendment. She made her case extremely well: R&D is important, and the Government could easily, with advantage, accept all three of the amendments as they stand. However, her introductory speech raised all the issues that have subsequently been picked up by other speakers, because we are facing what appears to be another black hole in this Bill. The noble and learned Lord, Lord Thomas, the noble Baroness, Lady Finlay, the noble Lord, Lord Fox and I have signed up to an amendment more in frustration than any genuine feeling that the existing clause is wrong, although the noble and learned Lord, Lord Thomas, does make a very good case for how the procedures adopted there are not the ones that should be seen in the final version of this Bill.

The question really seems to be about what our state aid regime is going to be. Is it going to be central or devolved in terms of both its process and delivery? Is there going to be a central body that will be charged with making sure that all those participants who benefit from state aid do so on a fair and open basis, and are they going to be able to review and make recommendations for how it is taken forward?

It seems to me this is another area where common frameworks have an opportunity to provide the solution to a problem the Government are facing. I hope that whichever way we go on this, time will be taken to make sure we get it right, do it properly and come forward with something that will justify the effort that has been placed in it, because it will be worth it.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

My Lords, I thank noble Lords who have taken part in this debate. I recognise that the hour is late, so I will attempt to be as brief as possible. I begin by setting out why Clause 50 should stand part of the Bill, before moving on to discuss Amendments 169A, 169B and 169C.

Clause 50 reserves for the UK Parliament the exclusive ability to legislate for a UK subsidy control regime in future. The Government have always been clear in their view that the regulation of state aid, which is the EU approach to subsidy control, is a reserved matter. Let me say in reply to the noble Lord, Lord Fox, that the devolved Administrations have never previously been able to set their own subsidy control reviews, as this was covered by the EU state aid framework. Now we have left the EU, we have an opportunity to design our own subsidy control regime that works for the UK economy.

It is important, in our view, that there continues to be a uniform position across the United Kingdom. Reserving will ensure we take a coherent and consistent approach to the way public authorities within the UK subsidise businesses, supporting the smooth functioning of the UK’s internal market. A unified approach will reduce uncertainty for UK businesses and prevent additional costs in supply chains and to consumers.

Also in reply to the noble Lord, Lord Fox, I say this reservation does not impact the devolved Administrations’ existing spending powers. The devolved Administrations will continue to make decisions about devolved spending on subsidies—how much, to whom and for what—within any future UK-wide subsidy control regime.

The Government announced in September that the UK will follow World Trade Organization rules for subsidy control from 1 January. These are internationally recognised common standards for subsidies. Before the end of the year, the Government will publish guidance for UK public authorities to explain these rules and any related commitments the Government have agreed in fair trade agreements. We will also publish a consultation in the coming months on whether we should go further than those existing commitments, including whether or not legislation is necessary, because we want a modern system for supporting British business in a way that fulfils our interests. We do not want a return to the 1970s approach of Government trying to run the economy or bailing out unsustainable companies. We will take the necessary time to listen closely to all those with an interest in this subject.

UK government officials have been meeting, and will continue to meet, their devolved Administration counterparts on a regular basis. We are keen to ensure that the devolved Administrations are involved in the upcoming consultation process. I hope that noble Lords will agree that this approach is the best, and indeed the only, way to ensure that the whole of the UK can benefit from having a consistent and coherent system of subsidy control, which is necessary to support the smooth running of the UK internal market. I therefore commend that Clause 50 stands part of the Bill. I hope that I have answered at least some of the questions from the noble Lord, Lord Fox. If not, I will write to him to confirm the other points.

I turn to Amendments 169A, 169B and 169C, in the name of my noble friend Lady Rawlings. They seek to amend the definition of a subsidy for the purpose of their reservation. They would add to this definition that a subsidy will also include “research and development grants”. The interpretation provisions contained in Clause 50 set out what is classed as a subsidy for the purpose of this reservation. We define a subsidy as including assistance provided to a person, directly or indirectly, financially or otherwise. The definition includes examples of this assistance as income or price support, grants, loans and guarantees.

For the purpose of the reservation of subsidy control, the definition of a subsidy is deliberately broad to ensure that we have sufficient scope to design a future domestic regime that meets the needs of the United Kingdom. To ensure that we cover a broad range of financial interventions, the definition is not currently limited by reference to any specific policy purpose or sector. Subsidies may be given for a variety of purposes, and it would be anomalous to single out just one of them here. The current wording in the clause already encompasses assistance provided to a person directly or indirectly by way of grants and is therefore sufficient to cover research and development grants as my noble friend intends. Therefore, the Government do not think that the amendments are legally necessary. I hope that, in the light of that information, my noble friend will be able to withdraw her amendment.

Lord Alderdice Portrait The Deputy Chairman of Committees (Lord Alderdice) (LD)
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I have received a request to speak after the Minister from the noble Lord, Lord Fox.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

With every answer, there come more questions, I am afraid. The Minister sought to explain that the devolved authorities will still be able to spend the money—I think those were the words that he used—but I am interested to know to which money he is referring. How in future will they get their hands on the money? Will there be a competitive bidding process? Is it part of the formula? Is that the money that he is talking about? Perhaps he could outline what he means by “the money”, because it is not entirely clear to me. He is looking at me as though I am being slightly stupid and I shall be very happy to be educated by him in writing rather than verbally.

Lord Callanan Portrait Lord Callanan (Con)
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I certainly did not intend to imply that at all and I apologise if the noble Lord got that impression. I was talking about the existing block grants that the devolved Administrations have. It is their existing spending power—the money that they spend at the moment. They will continue to make decisions about their devolved spending on subsidies, as they do at the moment—how much, to whom and for what—within any future UK-wide subsidy control regime if, following consultation, the Government and Parliament decide that we want to legislate in this space. I hope that I have resolved the noble Lord’s question; if not, I will certainly write to him.

Baroness Rawlings Portrait Baroness Rawlings (Con) [V]
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My Lords, I thank the Minister for his courteous and careful reply, and I thank all noble Lords who have spoken to these amendments, for and against. I am sorry that at this late hour several of your Lordships have, understandably, withdrawn.

I am most grateful to the noble and learned Lord, Lord Thomas. I take his point on the devolved matters and thank him for his very interesting contribution. I thank the noble Baroness, Lady Finlay, for her probing remarks, as always, and my noble friend Lord Trenchard, who fully understood what I am trying to do. I am most grateful to him for his kind words. I thank the noble Lord, Lord Fox, for his support. The noble Lord, Lord Stevenson, always makes good points and always asks even better questions.

My noble friend the Minister said that state aid was a reserved matter but we can design our own. I was not quite clear about that. I was even less clear on his explanation of why R&D should not be included; I feel that it is too important not to be included.

To conclude, these modest amendments are hardly revolutionary and are purely intended to help the Government in any future contracts so that we are less likely to lose out; it is a shame that the Government are not able to accept them. I hope that there may be some other way. I may return to the subject of research and development on Report. Having said that, for the time being, I beg leave to withdraw my amendment.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

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Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Wednesday 18th November 2020

(3 years, 4 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 150-II Second Marshalled list for Report - (18 Nov 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, this has been an excellent debate, despite the fact that it is decidedly one-sided—although the noble Baroness, Lady Noakes, did her best to redress the balance—and I look forward to the Minister’s response. I said to him in an earlier meeting that this might be one occasion—perhaps the only one—when the House would be happy to hear a full response from him to the points made by the noble and learned Lord, Lord Hope, and his distinguished co-signatories and supporters.

I say that because, as the noble and learned Lord said, although the amendments sensibly address the rules for the mutual recognition of goods in Part 1, services in Part 2 and professional qualifications in Part 3, their underlying, ancillary purpose is to support and enhance the relationship between the Governments of the four nations of this United Kingdom. They focus on the key question raised by the Bill: is this to be a single market under new rules created and imposed from Westminster or is it to be all four nations working together, managing appropriate divergence, as they are currently doing through the successful common framework process?

I hope the Minister will give us a full answer to the important questions raised by this debate. I also hope that he will reaffirm his Government’s commitment to our devolution settlement, because, as we have heard, our current settlement is under pressure—not least because of recent comments from the Prime Minister. This is not confined to the devolved Administrations. The virus, the recession and recent spats over local lockdowns, who manages public health and welfare best and who pays have exposed a centre that seems unable to listen and outlying areas that do not feel they are being consulted. As we will come to in later amendments, these are bodies with far greater knowledge of what is happening locally, but which lack the resources to solve the problems they identify. It can be argued that the Bill is actually about gathering powers which should be devolved to an insensitive centre which is trying to imprison a multinational country composed of vibrant, diverse regions with diverse histories and needs into a straitjacket of a unitary state. We can and need to do better than that.

As many noble Lords have said, the most striking aspect of this debate so far has been the wide cross-party support for these amendments, coupled with the fact that no fewer than seven members of the Select Committee considering common frameworks have made it clear beyond peradventure that the common framework process is alive and well, doing the job that the Government say they need done: supporting frictionless trade across the UK, improving standards, managing divergence and strengthening the union. Why is this process not at the centre of the Bill?

We support these amendments and will support the noble and learned Lord if he decides to test the opinion of the House. However, we heard from the Minister in earlier stages of the Bill and in separate meetings that his mind was not closed on this issue. Obviously, other interests are at stake here. However, the case made today by virtually everyone who has spoken has been strong and formidable in the arguments deployed. I urge the Government to give the House an assurance that they accept the principle that lies behind the amendments and that they will come back at Third Reading with amendments of their own which give effect to it. If so, we would support that.

It is clear that there is more that unites us on this issue than divides us, and it is clear from the tone and content of the debate that this would be the preferred solution of your Lordships’ House.

Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
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My Lords, in preamble, I say again that I agree with those who would like to see our old proceedings back; as long as I am trusted and have the privilege to answer to this House, I will seek to do so from this Dispatch Box. However, I say to my noble friends on the Liberal Democrat Benches that if they want to have heckling from the noble Lord, Lord Foulkes, they should be careful what they wish for.

In reply to the noble Lord, Lord Rooker, I try always to be in a conciliatory mood. Particularly after a debate such as this I am mindful of the wise advice of the Emperor Marcus Aurelius: “Accept modestly; surrender gracefully.” Unfortunately, however, as noble Lords who have had the privilege of serving in office will know, conciliation does not mean that one must accept specific amendments.

This debate was rooted in a passionate and sincere spirit, almost universally shared, of concern for the union and respect for devolution. As I say, that unites almost all of us who have spoken, including the Member now on his feet. The noble Lord, Lord Foulkes of Cumnock, made a fascinating and thoughtful speech, which of course I will study carefully. Those of us who care for the union and support devolution should be cautious in echoing the separatist claim that this or that action is being done to undermine devolution when it is not. The debate about effect and perceived effect is legitimate. The claim of bad intent that we have had from some is risky, if not perilous.

The UK Government and the devolved Administrations all have a clear stake in a smooth-functioning internal market, as my noble friend Lady Noakes pointed out. However, the Government have been clear—we have made no secret of this in the Bill—as my noble friend Lord Naseby said, that the right place for final decisions on the internal market should be the United Kingdom Parliament, where parliamentarians from all parts of the United Kingdom can debate and vote on legislative proposals.

I was asked a specific question by the noble Baroness, Lady Andrews; the noble and learned Lord, Lord Thomas of Cwmgiedd, touched on it also. New restrictions on the sale of goods, including goods made from plastic produced in or imported into one part of the UK, will be subject to the mutual recognition principle for goods unless an exclusion in Schedule 1 applies. The Bill will preserve the devolved Administrations’ ability to regulate in line with their own strategies and regulate production of goods in their territory. However, goods, including ketchup, sold lawfully elsewhere in the United Kingdom will not be denied access to other parts of the UK market unless an exclusion applies. Consumers are of course not required to buy them.

The noble and learned Lord, Lord Hope of Craighead, in his powerful opening speech claimed that the Bill “destroys divergence”—that it is not possible under the Bill. I want to make it clear that to say it is not possible is incorrect. The Bill will apply only where divergence would create a market barrier under the conditions set out in the Bill. Domestic producers will have to conform to local regulation, and devolved Administrations will be able to regulate the use of all goods.

My noble friend Lord Callanan and I have welcomed positive engagement with a number of your Lordships across the House on the common frameworks programme— some noble Lords have been kind enough to allude to that. This issue and the concerns raised in our debates are important. I hope we will be able to draw lessons from these discussions in the constructive spirit that they have taken on to date and find ways to set at rest some of the concerns expressed that we believe are unjustified.

As I have said before to your Lordships’ House, we, along with the devolved Administrations, remain committed to the common frameworks programme. We recognise the importance of the issue and the need to underline unequivocally the Government’s continued commitment to the frameworks programme, before and after the passage of the Bill. An iron curtain will not fall. For all the profound respect I have for the noble Baroness, Lady Finlay, I do not believe that that sort of language is helpful.

Our commitment has been made clear to your Lordships’ House at every stage in our debates and discussions on this to date, as the noble Lord, Lord Stevenson of Balmacara, said, and in the regular publication of framework analysis, which has been in circulation since 2008. The pursuit of this aim must respect the interests of the other parties involved in the common frameworks programme. There is no indication at present that the devolved Administrations would support placing common frameworks on a statutory basis. Indeed, when I had the privilege of giving evidence to a Welsh Senedd Select Committee last week, that was not the impression I received. However, in any case, common frameworks have not been designed to carry legal force.

The Government have made it clear—yes, I will use the word—that the frameworks programme and the UK internal market are two complementary undertakings. The devolved Administrations will continue to be able to innovate and regulate in devolved policy areas, but the UKIM Bill will create limits on the extent to which they can enforce new requirements against traders from other parts of the United Kingdom. The market access principles will ensure that any divergence does not damage the ability of UK companies or investors to trade with every part of the United Kingdom. I appreciate the feeling across the House on this matter, but the Government view retaining the flexibility and voluntary nature of the programme and respecting market principles as important and viable complementary objectives.

I acknowledge that there may be an appropriate way to put frameworks into the Bill while retaining the flexibility and the voluntary nature of the programme and respecting the market principles. However, I respectfully suggest that the approach proposed here to make these amendments to the Bill is not the right one, and I will seek to explain why.

The approach proposed in these amendments would significantly change the nature of common frameworks, giving agreements within them primacy over the market access provisions in the Bill, as acknowledged and argued by the amendments’ signatories. Although I understand the intention of these amendments in seeking to define the relationship between the common frameworks and the market access principles, they are problematic in a number of respects. The approach would automatically disapply the market access principles and mutual recognition of authorisation requirements in relation to regulations or requirements that implement agreements reached under common frameworks. I disagree with my noble and learned friend Lord Garnier; this creates a risk of legal uncertainty. On this I agree with my noble friend Lady Noakes in her powerful speech about the interests of business and consumers, particularly in the smaller economies of the United Kingdom—an aspect ignored by the signatories to the amendments.

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Baroness Randerson Portrait Baroness Randerson (LD)
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The Minister cast doubt on warnings about the impact on devolution. Has he looked at opinion polls in Wales tracking support for independence? That is a country that only 20 years ago very narrowly accepted devolution. It is a country that voted for Brexit, and one that is governed by a Labour-Lib Dem coalition—two unionist parties. You can see in that country the clear feeling about the way in which this Government are behaving.

Lord True Portrait Lord True (Con)
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My Lords, I am not sure that is directly relevant to the subject matter of the Bill. I thought I had in fact made the point that imputation of motive and intent is a political choice that should be exercised wisely. This Government’s intention in this Bill is in no way to undermine the devolution settlement and I have restated, from this Dispatch Box, our commitment to the common frameworks. As for opinion polls, if I were a Liberal Democrat I would not live by them.

Lord Hope of Craighead Portrait Lord Hope of Craighead (CB) [V]
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[Inaudible.]—perspectives have offered support to what these amendments seek to do. Picking up a point made by the noble Lord, Lord Cormack—sitting on my own in my little room, participating virtually—I too very much regret that it has not been possible for us all to join together in the Chamber. I see the value of the points he was making about introducing some more lively spirit among those in the Chamber, so there could be a real atmosphere of debate, which even remotely we would be able to enjoy.

I listened very carefully to what the noble Lord, Lord True, said. He expressed his position, as always, very clearly in careful language. I think, on a fair reading, that the clauses in Parts 1 and 2 are more absolute in their effect than he was making out, and I do not accept the criticisms that he makes of the amendments’ effect. Of course, I do not claim that the amendment I have put forward is a final solution; there was always an option open to the Government. If they thought the amendments could be improved upon or altered to meet some of the points that the Minister made, that could have been done—but there was no such offer forthcoming from him, for reasons that I understand.

The question was whether the devolved nations should continue to be free to develop and apply market policies within their devolution mandate which have secured agreement under the common frameworks process, or whether that freedom should simply be brushed aside, as the Bill really seeks to do. It is difficult to avoid the conclusion that this Government regard devolution as an inconvenience that can simply be ignored when they want to. I regret that very much indeed. I am a unionist and I believe in the union and all that it stands for, and all the values that I hope it will continue to give us in future. But I am afraid we see here an uncompromising, careless and centralist style of government, which divides our United Kingdom into pieces at a time when harmony is most needed. That has no place in our democracy.

I know that the Minister will reflect very carefully on what has been said today, and I hope that he will do his best to persuade those at the heart of government to think again, but what he has said in his reply leaves me with no alternative. I seek to test the opinion of the House on my amendment.

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16:08

Division 1

Ayes: 367


Labour: 147
Crossbench: 98
Liberal Democrat: 80
Independent: 20
Conservative: 15
Green Party: 2
Ulster Unionist Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 209


Conservative: 190
Independent: 8
Crossbench: 6
Democratic Unionist Party: 5

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Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, as I have said before, the women in the House always get a bit nervous when we talk about Henry VIII. We have only to go outside and see what happened to some of Henry VIII’s women to remind us that we are a bit uncomfortable with him.

The debate has made clear why the amendments in the name of my noble friend Lady Andrews and fellow members of our always brilliant Delegated Powers Committee should be heeded. Indeed, the unanswered question, posed by my noble friend, is why the Government have not removed the powers in Clause 6 in the way that they have now agreed to remove them in Clause 3. Why the inconsistency? What is the difference between them? Our Delegated Powers Committee certainly did not distinguish between the two pillars of the internal market—market access and non-discrimination— so we do not understand why the Government have taken such a different view on those. Without a stunning, innovative answer—the Minister looks as though he may have one, but there was none such in his letter of 12 November to the Delegated Powers Committee—when we come to Amendment 7 a little later, we will throw our weight behind it to remove the sections which, as the noble Lord, Lord Beith, has just set out, give overwhelming power to Ministers. Furthermore, as my noble friend Lady Andrews says, if these are meant to be just backstop powers to correct as yet-unknown deficiencies, then, given that Clause 13 affects all parts of the UK, it should be for Parliament, not Ministers in Westminster, to make any correction, with the full panoply of safeguards that come with primary legislation for input from the two Houses as well as from the devolved legislatures.

It is really not good enough—in a Bill which, after all, they must have known for four years they would need—for the Government at this stage still to be so unsure that they have thought of everything and drafted correctly that they need to accord to themselves these extraordinary powers to amend important parts of what will then be an Act of Parliament. That was never the purpose of secondary legislation. Indeed, as the Minister will know, we feel that it is likely that the proposed use of these ministerial powers is more the result of the Government’s tendency to rely on them rather on than proper primary legislation on a wide variety of measures. Indeed, as the noble Baroness, Lady Meacher, noted, so common has this become that my noble friend Lady Taylor of Bolton wrote on behalf of the Constitution Committee to Mr Rees-Mogg on 9 November suggesting how to diminish the practice, while the noble Lords, Lord Hodgson and Lord Blencathra, from the Secondary Legislation Scrutiny Committee and the Delegated Powers and Regulatory Reform Committee respectively, similarly wrote to Mr Rees-Mogg on 10 November, specifically with concerns about “skeleton bills and skeleton provision”, noting his acknowledgement that delegated powers

“should not be ‘a tool to cover imperfect policy development’”

and reiterating the need for the Government “at all times” to

“fully justify the appropriateness of delegated powers”.

I fail to hear such justification for these particular powers. Therefore, while welcoming the Government’s support for Amendment 2, we will support Amendments 7, 12 and the others in this group.

I am delighted that, because of the acceptance of Amendment 2, my Amendment 4 is pre-empted. For those who do not follow all this, Amendment 4 would have amended subsections (8) to (11), which was a regulation-making power. We were seeking to give the delegated legislatures a say over that. But clearly, as those powers have come out, my Amendment 4 luckily is pre-empted and not needed. However, we will return to similar amendments next week. For the moment, we welcome the moves of the Government on Amendment 2 and, in due course, unless the Minister comes up with a stunning answer in the next few minutes, we will support Amendment 7 in its place.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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I thank everybody who has spoken in the debate so far. Just before we start, let me give my personal support—not a matter for the Government—to the gruesome twosome, the unholy alliance between the noble Lords, Lord Foulkes and Lord Cormack. I hope that we can get back to full and proper debate in this Chamber as quickly as possible. I do not know about other noble Lords, but I quite miss the heckling from the noble Lord, Lord Foulkes; it adds a bit of interest and spice to our debates. I am sure that the noble Baroness, Lady Jones, copes very well with debate in this Chamber, of which she is a noted exponent.

The Government have listened closely to the concerns from colleagues from all sides of the House and outlined in the DPRRC report. I thank your Lordships for the helpful debates that we had, and I hope noble Lords will think that I have responded at least to some of the points that were made. As I set out in my letter to colleagues last week, we listened closely to all your Lordships’ comments and, after further reflection, we are proposing a number of changes in line with many of those comments to how these powers will operate. The amendments will remove powers that are now, on further reflection, considered non-essential and will provide the fullest transparency and accountability in the use of those that remain. We hope that the package of changes proposed will address the concerns that were raised and provide some reassurance that the Government take their responsibilities seriously in administering these powers.

I understand from the comments of the noble Baronesses, Lady Hayter and Lady Andrews, and others that noble Lords intend to divide the House on this issue tonight. I hope that they will consider carefully what we hope will be very welcome steps before voting in a way that will have quite far-reaching consequences for the operation of the UK internal markets. Given that there are no other groupings today and next week on the delegated powers more generally, I hope that noble Lords will allow me to discuss this grouping in a little more detail.

First, the amendment in the name of the noble Baroness, Lady Andrews, will remove the ability of the Secretary of State to amend the list of statutory requirements that are in scope of the mutual recognition principle for goods. While our position remains that the majority of the powers in the Bill are essential, as I said, in this particular case we are now content that the removal of the power will not substantially undermine the operation and flexibility of the internal market system. Therefore, we have removed the power—I have added my name to the amendment from the noble Baroness, Lady Andrews—in combination with further changes on transparency and accountability that we are proposing.

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Lord Foulkes of Cumnock Portrait Lord Foulkes of Cumnock (Lab Co-op)
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My Lords, at a time when the role and, indeed, the very existence of this House is under increasing scrutiny, would the Minister agree that the fact that he has put his name to Amendment 2, and that he and the Government have accepted the spirit of many of the amendments that were moved in Committee, underlines the value of this second Chamber as a revising Chamber and that that is something that should be broadcast widely?

Lord Callanan Portrait Lord Callanan (Con)
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I agree with the noble Lord, actually. If you look at the degree of scrutiny with which this House has portrayed this Bill, as opposed to the degree of scrutiny in the other place, you see the value of the debates we have here.

Baroness Andrews Portrait Baroness Andrews (Lab) [V]
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I am very grateful indeed to everyone who has taken part in this debate, particularly those noble Lords who signed my amendments. It has been a very useful and illuminating debate. I am grateful to the Minister for his detailed responses and, particularly, the information he has provided on the review. Retrospective reviews are always too late to improve or perfect what has happened, but I understand that this is a useful step forward, and I look forward to more detail.

I am afraid I am unable to accept his explanation of the difference between Amendments 2 and 7 in relation to the two clauses. I was struck by the use of the term “non-essential” powers, which was applied to Amendment 2 to Clause 3 and which has enabled the Government to sign the amendment, but made them unable, in the same sense, to apply the same logic to Clause 6.

Very briefly, I will read what the Delegated Powers Committee report actually said about Clause 6, which deals with non-discrimination:

“It suffers from similar defects”


to Clause 5. The report continues:

“The Government say … that the power in Clause 6(5) is necessary to ‘future-proof’ the operation of the non-discrimination principle. They might have said ‘to completely re-write’ the non-discrimination principle.”


We believe that the extreme degree of freedom that these powers give Ministers to go back almost to the drawing board and rewrite their own legislation by way of secondary legislation is so dangerous. Although the Minister has made a case for the distinction, I am afraid it is not one I can accept. Therefore, he will not be surprised when I say that I shall press Amendment 7 to a vote when we reach its place on the Marshalled List.

I say again that I am extremely grateful that the Government have responded so positively to the arguments of the DPRRC, the Constitution Committee and your Lordships, supported Amendment 2 and brought forward these other amendments, as outlined by the Minister this afternoon and in his letter. I beg to move.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, the noble Baroness, Lady McIntosh, and my noble friend Lord Foulkes have made the case clearly around the issue raised in Clause 5(3), and I hope the Minister will be able to respond. I join them in thanking the Scottish Law Commission for its considerable work in scrutinising some of the detail of the Bill—as always, it has been very helpful. I put on record our thanks to the noble Baroness, Lady Ritchie, for her very comprehensive and clear explanation of Amendment 24 in her name, and to others who have spoken.

We on this side had the benefit of a presentation by the Equality and Human Rights Commission and the Northern Ireland Human Rights Commission on this point, and I was seized by the fact that this is very important indeed to them and a matter that really has to be dealt with. The ground has been covered very fully and I just want to make sure that it is clear that we support this important amendment. It is designed to ensure that the non-discrimination principle in Clause 5 cannot be used to challenge the statutory provisions introduced in Northern Ireland after the end of the transition period to fulfil the obligation set out in Article 2 of the Northern Ireland protocol. That is relatively easy to say, but it is rather difficult to see how it translates into legislation. I hope that, when he responds, the Minister will be able to give us clarity on this.

As my noble friend Lord Hain said, the stakes here are very high. If you have not been to Northern Ireland, it is sometimes very difficult to get why it is so important to the people there and to the institutions that have to operate within Northern Ireland. There is a very widespread respect for human rights and equalities issues in Northern Ireland; it is something that comes up in conversations wherever you have them, in relation to employment, services, goods and operating in the commercial sector in Northern Ireland. Once you have had that conversation, and once it has been explained to you why it is so important, it is very clear that this is a matter that cannot be left. It is up to the Government to explain now how it is going to happen, and I look forward to hearing from the Minister.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, I thank all noble Lords who have contributed to this debate.

Amendment 6, in the names of my noble friend Lady McIntosh and the noble Lord, Lord Foulkes, seeks to clarify the meaning of Clause 5(3). This subsection explains that

“A relevant requirement … is of no effect in the destination part if, and to the extent that, it directly or indirectly discriminates against the incoming goods.”


This wording was chosen by the Government because it targets discrimination, while leaving intact other elements of a regulation that may be perfectly useful or serviceable. For example, consider the case of one requirement covering two products. One of those products is not discriminated against, but the other faces indirect discrimination due to the particular market structure for that product. Clause 5 ensures that the regulation of the product which is not facing discrimination continues. This would not be the case if the requirement were struck down in its entirety when any part of it is discriminatory.

This amendment gives rise to a risk that a court would read this as attempting to oust its jurisdiction on normal grounds of challenge. That is clearly not the intention of this provision, which is to target the mischief of discrimination without going further or interfering with other legislation. I am sure that it goes without saying that we would not want to invoke any such confusion, nor do I think that that is what my noble friend and the noble Lord are trying to achieve. For these reasons, I hope that my noble friend will feel able to withdraw her amendment.

On Amendment 24, from the noble Baroness, Lady Ritchie, and others, I am very happy to accept a letter from the noble Baroness, and I will ensure that it gets a full reply. The Government are fully committed to Article 2 of the protocol—that goes without saying. We have demonstrated this by making the necessary amendments to the Northern Ireland Act to establish the dedicated mechanism and by working closely with the Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland to operationalise the dedicated mechanism, ready for the end of the transition period.

The Article 2 commitment is about protecting the specific rights that individuals are afforded under the Belfast/Good Friday agreement and non-discrimination in this regard. It is supported by six EU equality directives that are all designed to tackle discrimination because of specified protected characteristics of individuals and to promote equal treatment. It will be part of the role of both commissions, through the dedicated mechanism structure, to monitor, advise, report on and enforce the Article 2 commitment and report to the Government and the Executive Office in Northern Ireland in this regard.

As I have said, we have already delivered the relevant legislative measures to give effect to Article 2 of the protocol, and no further amendments are required in this regard. I can assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward and will not be impacted by the outworkings of this Bill.

In reply to the noble Baroness, Lady Suttie, I can say that, for statutory requirements to be relevant requirements under Clause 6, they must be requirements that apply to, or in relation to, goods sold in the nation in question. If the employment law requirement were to meet that test, they would not be disapplied because they had discriminatory effects.

I hope that, with those assurances, that the noble Baroness, Lady Ritchie, will not press Amendment 24.

Baroness Garden of Frognal Portrait The Deputy Speaker (Baroness Garden of Frognal) (LD)
- Hansard - - - Excerpts

I call the Baroness, Lady McIntosh of Pickering.

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Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

In short, I addressed the point made by the noble Baroness, Lady Suttie. No, I do not believe that this will be a problem. We will, of course, keep it under review if any such problem were to be relevant. We think that we have already legislated to ensure these requirements and that, therefore, this amendment is unnecessary.

Baroness Garden of Frognal Portrait The Deputy Speaker (Baroness Garden of Frognal) (LD)
- Hansard - - - Excerpts

I have just received a message that the noble Baroness, Lady Ritchie, would like to speak briefly.

Baroness Ritchie of Downpatrick Portrait Baroness Ritchie of Downpatrick (Non-Afl) [V]
- Hansard - - - Excerpts

My Lords, I would like to ask the Minister a further question. In my submission, and the submission of the noble Baroness, Lady Suttie, we specifically asked the Minister for a meeting for the Northern Ireland Human Rights Commission and the Equality Commission, along with the signatories of Amendment 24, to further discuss the outworkings of Clauses 5 and 6 and Clause 11, and also the complex nature of our amendment and the problems that could ensue as a result of the outworkings. I would greatly appreciate it if the Minister could accede to our request.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

The noble Baroness also asked me if I would receive a letter, and I said that I would do so. That is probably the best course of action. If she writes to me with her concerns, we will, of course, look at it. I am not sure that I am the right Minister for any such meeting to take place. I am a Minister in BEIS, which is responsible for this Bill, but many of its aspects are, of course, being handled by other government departments. I will certainly seek to put her in touch with the correct and relevant officials and Ministers.

Baroness Garden of Frognal Portrait The Deputy Speaker (Baroness Garden of Frognal) (LD)
- Hansard - - - Excerpts

I think that I am now safe to call the noble Baroness, Lady McIntosh of Pickering.

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17:49

Division 2

Ayes: 327


Labour: 148
Liberal Democrat: 78
Crossbench: 72
Independent: 15
Conservative: 6
Green Party: 2
Bishops: 1
Ulster Unionist Party: 1
Plaid Cymru: 1

Noes: 223


Conservative: 194
Crossbench: 15
Independent: 10
Democratic Unionist Party: 3

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Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, this debate raises an important and much wider issue about how statutory instruments are dealt with and how much consultation goes into them. When we discuss them in the Moses Room, the Minister often hears from all of us: “Who did you consult and can we hear the feedback?” There are some really important general lessons to take from that, because, as all of us who have dealt with statutory instruments will know, often someone gets in touch at the very last moment to say that a statutory instrument does not work for their industry or their sector. Usually it is an issue of practicality rather than the policy, but by then it is too late, which is immensely frustrating.

The problem with the Bill is that we should not have these powers when dealing with policy. It goes back to what I said in the earlier debate: statutory instruments were never meant to be about policy shifts, but about the practicalities or some adjustment. In a way these amendments, whether right or wrong, are wrongly focused. We should not be saying, “These things need lots of scrutiny because they are terribly important.” If they are terribly important they should not be using these powers.

It will not come as a surprise that I much prefer the amendments in my name that we will get to later, since Amendments 4 and 5 were pre-empted. They are also about the internal market. We are talking about regulations that affect the other parts of the United Kingdom, and very few, if any, would have no effect. Our other amendments propose that regulation-making will need the consent of the devolved Administrations unless that has not been possible within a month. In that case this Parliament will be able to put them through, but with a reason why it is doing so without the consent of the devolved Administrations. This is interesting, and in a way has a much shorter term than this amendment. It is more focused and specifically looks at this Bill, which is about producing regulations that affect the other four nations. I am sorry, but I prefer my amendments to these ones. The issue of scrutiny of statutory instruments is serious. Maybe we can get a better practice so that we do not end up with stuff that is not quite fit for purpose, and which it is then too late to do anything about.

Lord True Portrait Lord True (Con)
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My Lords, I am grateful to those who have spoken in the debate, which I will try to sum up briefly. As the noble Baroness, Lady Hayter, indicated, because of the quite proper impact of the pre-emption rule, and of how the Bill is grouped and how we consider it, there will be further opportunities to address in a later group the points she raised and those raised my noble friend Lady Neville-Rolfe on the appropriateness of the use of powers. Obviously, most amendments in this group follow on from and, as the noble Baroness, Lady Hayter, said, precede discussion on powers that are all exercised in the Bill as drafted by the affirmative resolution procedure.

We contend that those powers are necessary to provide flexibility to respond to future developments in the provision of goods and services trade. As my noble friend Lord Callanan said, and I venture to suggest might say again, we are fully committed to ensuring that these powers are used appropriately. The powers will be subject to parliamentary oversight to give them the widest legitimacy, which means that we will consult appropriately on the use of the power, including with each of the devolved Administrations.

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Lord Naseby Portrait Lord Naseby (Con)
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My Lords, I respect the views of the noble Baroness who has just spoken, but I have to say that there is little in what she said that I agree with. Amendments 21, 48 and 49 are quite different from Amendments 10 and 11. They go, in my judgment, way beyond what is necessary for a successful free trade market. Really they amount to micromanaging, and on the whole Her Majesty’s Government in any form, whether it be devolved or central, certainly are not terribly good at managing commercial activities. So I suggest that those amendments are unacceptable.

Amendment 11 is one that I warm to because the environment is absolutely crucial. In that context we include climate change, which we know is affecting every nation in the world, so that is a very serious area. Whether this amendment is the right one or not is almost for the Government to decide. I care deeply about the environment. I am privileged to live outside London. I shall drive home tonight, 50 miles to Bedfordshire, and it is a very nice environment there. It is essentially a horticultural one, which brings me to the point that horticulture is changing, not least because we are looking to achieve a fair degree of import substitution. All sorts of new challenges arise from that. We virtually gave up in the glasshouse world, losing out to Holland. There is all sorts of experimentation going on—growing vegetables just in water and so on—but this is not the time to go into that.

I do worry that there are products at the margin, where there is always somebody lobbying against them. Smoking has been mentioned. I have never smoked, but I accept the current situation in which people have the right to smoke if they wish to, and there are clear frameworks in which they can follow that. Pesticides are important in the horticultural world because they affect yields; again, that is a controversial area. So I will listen to my noble friend, particularly on Amendment 11, about which I have a reasonably open mind. I know that the environment is absolutely crucial, but I do not want to see areas of our society and our market squeezed out because of some heavy lobbying from one particular group who do not like the particular industry involved.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, Amendments 10, 11 and 41 would expand the list of legitimate aims used to justify where statutory requirements in one part of the UK can indirectly discriminate against goods or services from another part of the UK. So I will start by saying that the Bill provides an updated, coherent market structure which will help to avoid future complexities and prevent costs being passed on to customers through an increase in prices or a decrease in choices. An expansive list of legitimate aims would increase the potential discrimination faced by businesses or service providers, eroding the benefits of the internal market and creating damaging costs and internal barriers to trade.

The current list in the Bill is targeted to allow nations to meet their respective goals while avoiding unnecessary damage to the internal market—a point that was well made by my noble friend Lady Neville-Rolfe. For example, the Bill already includes the protection of public, plant and animal health, and in some cases, of course, this will align with the protection of the environment. However—I cannot stress this enough—the Government have repeatedly committed to maintaining our world-leading standards across a number of different areas, whether that is in consumer protection, the environment, social and labour standards or public, animal and plant health. The Bill does not undermine the great strides that we have taken in these areas, and we will continue to be at the forefront of improving and protecting our high standards.

Under this Bill, the devolved Administrations will retain the right to legislate in devolved policy areas. Legislative innovation remains a central feature and, indeed, a strength of our union. The Government are committed to ensuring that this power of innovation does not lead to any worry about a possible lowering of standards, by both working with the devolved Administrations via the common frameworks programme and by continuing to uphold our own commitment to the highest possible standards. It is important to remember that the market access principles do not prevent the UK Government or the devolved Administrations adopting divergent rules for goods or services.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

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Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020

(3 years, 4 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 150-III(Rev) Revised third marshalled list for Report - (23 Nov 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
14: Clause 8, page 7, line 4, at end insert—
“(8A) Before making regulations under subsection (7) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending the “legitimate aims” in Clause 8 (which can mean that provision does not count as indirectly discriminatory against goods).
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, I start by bringing to the attention of the House an inadvertent error that I made in one of my replies last Wednesday. In response to the noble Baroness, Lady Ritchie of Downpatrick, I misread my note on the relationship between the non-discrimination principle and employment law requirements, and got one word wrong. I should have said:

“If the employment law requirement were to meet that test, they would not be disapplied unless they had discriminatory effects.”


I reassure that House that my misspeaking in this case was, of course, entirely unintentional.

To be absolutely clear about this point, we have already delivered the relevant legislative measures to give effect to Article 2 of the protocol. I again assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward and will not be impacted by the outworkings of this Bill. Even if employment law requirements were in scope of the non-discrimination principle, which they would not generally be as they would have to relate to goods sold, they would not be disapplied unless they had discriminatory effects. As I said to the noble Baroness, Lady Ritchie, last week, I would be happy to facilitate a meeting between her and interested parties and the relevant Ministers and officials, and I stand by the commitment that I gave then.

On the subject of today’s groupings, the amendments in my name would ensure that the Government consult with the devolved Administrations when seeking to use powers. As we made clear in Committee, if the powers are required, we will of course engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. We have been listening to colleagues in the House and appreciate that there is an appetite for these commitments to be included in the Bill. We are therefore introducing these amendments to put beyond doubt our commitment to consult each of the devolved Administrations if any of the relevant powers are used. The consultation requirements and the commitment behind them are clear. However, once consultation is undertaken, the right place for final decisions should be back in Parliament, where parliamentarians from all parts of the United Kingdom can debate and vote on the proposed use of these powers.

It is also worth noting the separate amendment we have tabled, requiring the Secretary of State to review and report to Parliament on the exercise and effectiveness of the powers in Parts 1 and 2 within five years. That will provide an additional degree of accountability and scrutiny, and will again involve consultation with the devolved Administrations—something that I know the House is keen on. For the reasons I have set out above, I hope that noble Lords will accept the amendments in my name, and agree that Amendments 18, 32 and 43 are therefore unnecessary.

Having set out the reasonable measures that Government have tabled, I turn to Amendments 15, 20, 34, and 46. These seek to add additional processes around devolved Administration consent before use of the relevant powers. We have been listening to noble Lords and appreciate the appetite for these commitments on devolved Administration engagement to be included in the Bill. As I have already explained, we are therefore seeking to amend this clause to require consultation with the devolved Administrations prior to use of the power, putting our commitment beyond doubt. As part of this, we will of course set out reasoning for seeking to use the powers, both to the devolved Administrations and to Parliament. We will also seek to reach agreement with the devolved Administrations wherever that is possible. Because of this, it seems to us that putting into legislation the process proposed by noble Lords in their amendments would be duplicative and unnecessary. For these reasons, I hope that the amendments we have already tabled address the concerns of noble Lords, so these amendments are unnecessary.

Amendment 16 requires the publication of the results of consultation on the exercise of the power in Clause 8. While this power was removed from the Bill last week, I will speak briefly about the Government’s position on the subject. The exercise of this power would require consultation with the devolved Administrations. They are perfectly capable of deciding to publish their responses if they so choose. It is not necessary to make that choice for them in this Bill. For these reasons, I ask the noble Baroness not to press that amendment either.

Amendments 26, 27 and 28 would require the Secretary of State to consult all three devolved Administrations before preparing, revising or withdrawing guidance on the operation of the UK market access principles. Amendment 27 specifically stipulates that the Secretary of State should seek the consent of the devolved Administrations. However, should formal consent not be received within a month, the Secretary of State may proceed none the less. This amendment further states that where the Secretary of State makes regulations without obtaining consent, he must publish a statement explaining why. The guidance is itself explanatory; it is important to note that it is not a power to make or amend regulations.

It goes without saying that as part of the guidance process we will engage with all the relevant stakeholders, including the devolved Administrations, because we are committed to helping regulators and traders understand the principles and make the best possible use of them. However, this guidance will not change the rules that apply, so the formal consent of the devolved Administrations should not be required. It is also unnecessary to have a legislative consultation process with the devolved Administrations alone in respect of the guidance, when the guidance will be explaining, not making, the law.

I hope that with those words I have reassured noble Lords on this matter and they feel able not to press their amendments. In the meantime, I beg to move.

Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, first, I thank the Minister for his correction on the unforced error, I think it is called, in what happened on Wednesday. The noble Baroness, Lady Ritchie, will be speaking later and I am sure will comment on that; I hope the House can let her even if it is not specifically in this group. When the Minister responds, I would ask him to ensure the meeting that he has kindly offered takes place before Third Reading, so that if anything needed adjustments, we would be able to look at it at that point. As I say, I am absolutely certain that it was an unforced error, but it would be nice to have that clear.

We are pleased about parts of this, and certainly the review of the use of powers. It may seem odd to the House that we are continuing with these amendments, almost all of which—the guidance being the exception—set down how regulations should be made, even as the very power to make such regulations is about to be removed from the Bill. Nevertheless, we are in agreement with the Minister that it is helpful to deal with the amendments in his name and those in mine and others’ which deal with how these powers would be handled, should they be put in.

Therefore, it is helpful to have our Amendment 15, which I will formally move in due course, as well as Amendments 20, 24 and 26 in the Bill, so that the Commons and the Government will be well aware—assuming that our amendments are passed—that this House would expect any regulation about the functioning of a market across four nations to be made in partnership with those other three participants.  

  Amendment 15 and the others go further than what the Minister has offered in his. He has quite rightly added consultation; ours go further than that, but they do not hand a veto to any one of the devolved authorities. What they do is take further the welcome admission by the Government, in their Amendments 14, 19, 36 and 45, that it would be unthinkable to make regulations affecting devolved competences without consulting their Governments and legislatures. Our further step is to add some grip to the consultation by making it a proper involvement. The amendments say that the devolved authorities must either give their consent to the regulations within a month, or else the Government can continue but would have to explain to Parliament and the public why they were proceeding without agreement. This does not seem much to ask. It will not cause any delay, but it would ensure that there was no risk of any tokenism in the consultation. Instead, the devolved authorities will have to reply, and speedily, and the Government would simply have to explain why they wanted to proceed contrary to any of the devolved authorities’ views before proceeding. 

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Lord Callanan Portrait Lord Callanan (Con)
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My Lords, I am sure that noble Lords will be happy to know that I can be brief, because of course I set out the Government’s position on these matters in my opening remarks. However, to summarise, we feel that we have set out a comprehensive package of changes to the delegated powers in the Bill to address many of the concerns that have been raised about the role of the devolved Administrations. Of course, it is always a great regret for me to disappoint the noble Lord, Lord Liddle, but I have to say that on these matters I am able to go no further.

Devolved Administration consultation is now required by legislation prior to any use of the key powers in Parts 1 and 2. The Secretary of State will also be conducting a thorough review of the exercise and effectiveness of each of these powers within five years, which again will require consultation with the devolved Administrations. Our approach will ensure a high degree of transparency and scrutiny and will guarantee devolved Administration involvement whenever the powers are used or, indeed, reviewed. The alternative approaches proposed in the group would, in my view, overcomplicate these very clear commitments.

I shall reply briefly to the questions that were put to me. In response, first, to the noble Lord, Lord Hain, I can confirm that the policy statement he referred to is accurate. With regard to his second question, the design of the Bill is different from the EU single market because the Government’s approach does not simply copy out EU rules, and that means that the constraints under which we operate are different.

The noble Lord, Lord Foulkes, asked about the procedure for consultation. The Bill now requires that consultation should occur as a matter of fact before Ministers exercise their delegated powers. As is normal for such legislation, it does not spell out in great detail how this must be achieved, but we will engage with the devolved Administrations as part of the process of normal policy development such as, for example, sharing draft SIs and publications and co-operating on public-facing events wherever that is possible, and then in any case more formally before a decision is made.

The noble Lord, Lord Morrow, asked why we should consult with the Department for the Economy in Northern Ireland. I can tell him that the reference to the department is consistent with the precedent of the Northern Ireland devolution settlement. Finally, perhaps I may confirm yet again to the noble Baroness, Lady Ritchie, that I will urgently seek to facilitate a meeting for her and the interested parties that she requested.

With those commitments and answers to the, I hope that noble Lords will feel able to support the Government’s approach to this matter.

Baroness McIntosh of Hudnall Portrait The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
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My Lords, I have received two requests to ask the Minister a short question. They are from the noble Lord, Lord Empey, and the noble Baroness, Lady McIntosh of Pickering.

Lord Empey Portrait Lord Empey (UUP)
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Briefly, my Lords, a question has been raised in the House on a number of occasions: why are Welsh and Scottish Ministers referred to, but a Northern Ireland department is referred to? The reason is that, since 1921, power is devolved in Northern Ireland to the department, not to the Minister. The role of the Minister is to direct and control the department, but the department can still function without a Minister. It is a quirk that goes back 100 years, but it is there.

The noble Lord, Lord Morrow, made a relevant point. I do not know what the Minister means by “consistent with the devolution settlement”, because nothing in the settlement that I am aware of determines that this particular department is responsible. But, if you want a plural, because “Ministers” are referred to in the plural in Scotland and Wales, the only collective equivalent in Northern Ireland is the Executive—or, to meet the point made by the noble Lord, you could say, “Northern Ireland departments as appropriate”. But the reason for the difference is historic; it is not an error, as some people thought in the past. It is consistent with the fact that powers are devolved to the department and not to the Minister.

Lord Callanan Portrait Lord Callanan (Con)
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I of course thank the noble Lord for his help in answering the question more thoroughly than I did, and I can confirm my understanding that he is correct in what he says.

Baroness McIntosh of Pickering Portrait Baroness McIntosh of Pickering (Con)
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My Lords, I am overwhelmed that my noble friend the Minister has accepted Amendment 14. Perhaps I may press him a little more on Amendment 16. If I understood him correctly, he said that it should be for all of the devolved Administrations to publish their responses to a consultation. I would beg to differ. It would be much better for all concerned, including myself, to find in one location on a national Westminster-based government website all the responses that have been published.

He did not comment—I would be grateful if he would—on why he would feel unable to give reasons for any decisions reached. I am grateful to the noble Lord, Lord Foulkes, who has also signed Amendment 16. Is there any problem the Government would have in giving reasons for any decisions if they were not prepared to accept the responses to the consultations from the devolved Administrations?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I will write to the noble Baroness with further information on that point.

Amendment 14 agreed.
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16:29

Division 1

Ayes: 319


Labour: 135
Liberal Democrat: 81
Crossbench: 76
Independent: 13
Conservative: 5
Green Party: 2
Bishops: 2
Ulster Unionist Party: 1
Plaid Cymru: 1

Noes: 242


Conservative: 203
Crossbench: 21
Independent: 11
Democratic Unionist Party: 5
Ulster Unionist Party: 1

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Moved by
19: Clause 10, page 7, line 25, at end insert—
“(4) Before making regulations under subsection (2) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending Schedule 1 (which contains exceptions from the rules about market access for goods).
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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, this has been a very interesting debate for a number of reasons, which I shall come back to as I conclude. The noble Baroness, Lady Noakes, as she often does, focused on the key issue in play here: where we best situate the balance in an internal market that is as integrated as we currently have, which needs and respects clearly harmonised rules but also allows for joint processes which allow individual parts of the market to develop at different rates in different places. I think we agree that that is the key issue but differ on where the balance must lie and whether it has to be uniform as much as the Bill seems to suggest it will be.

The main interest in this debate has been in focusing our minds on areas that we have not really touched on in recent groups. We have looked at goods and services and at qualifications and how they might be harmonised, and we are coming back to services and qualifications later in our debates this evening. The points made by the noble Lord, Lord Wigley, about whether current policy might be adapted because of the impact of this Bill when it becomes an Act need an answer, and I would be grateful if the Minister could respond in particular to that point. Is there a particular hook in this Bill that will cause difficulties across the devolved authorities?

Secondly, on the point made by my noble friend Lord Hain, could it have an adverse effect on current processes so that, for instance, we would lose the local benefit policies to which he referred? Thirdly, on the point raised by my noble friend Lord Liddle, if there are good and valuable initiatives on local growth and support for sectors that are perhaps subsets of the national economy that are appropriate and best organised and run from a local point of view, how will they be affected by the way in which the Bill imposes a straitjacket on the various initiatives that we want to see come forward? I look forward to hearing from the Minister.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, as the Government set out in Committee, we intend to consult shortly and deliver measures on procurement through a wider package of procurement reform. The aim is for primary legislation to be made in the second Session. Therefore, I hope that this will offer some reassurance to noble Lords that this amendment is unnecessary, because the market access principles will not typically operate in the area of public procurement, as they are about how business is regulated. The procurement rules cover how public authorities carry out their procurement activities. Therefore, I reassure the noble Lords, Lord Wigley and Lord Liddle, the noble Baroness, Lady McIntosh, and others that there will be no impact on public procurement.

Turning to Amendment 23, we have obviously had these debates before; in fact, I recall having them during the passage of the various Brexit Bills with many of the same speakers. As we explained on previous occasions, the exclusions we have drafted for goods in Schedule 1 are narrow and tightly defined to protect the functioning of important policy areas. This protects the ability of the devolved Administrations and the UK Government to preserve the proper functioning of important policy areas, while at the same time avoiding any harmful or costly barriers to trade within the UK internal market.

More generally, I understand that this amendment is designed to strengthen the devolved Administrations’ ability to take different approaches to public policy related to aspects of the environment. We have made it clear that the Bill contains derogations for the protection of the life of humans, animals and plants, which aligns with protection of the environment in many cases.

Secondly, the Government support and respect the devolved Administrations’ right to set policy in their areas of devolved competence. The Government also recognise the benefits of locally targeted policy and the potential for policy innovation. For example, on the environment, between 2018 and 2019 the UK nations all introduced a ban on microbeads in rinse-off personal care products, working together to take a landmark step in the fight against plastic waste. There is no reason why the provisions in this Bill would hinder similar collaborative initiatives.

However, it is important to acknowledge the unprecedented and significant flow of powers to the devolved Administrations, as well as the incoming ability of the UK legislatures to create new policy in areas previously overseen by the EU. This Bill aims only to ensure frictionless trade, movement and investment between all nations of the UK. The policies that different parts of the UK choose to pursue in future is a matter for each Administration.

A number of noble Lords, including the noble Baronesses, Lady Boycott and Lady Randerson, raised yet again the sale of coal across the English-Welsh border, and my noble friend Lord Randall introduced the new issue of peat. The same thing applies in both cases: there is a clear distinction between sale and use. Under mutual recognition, the use of coal or, indeed, peat—it is probably a form of coal, is it not?—could be banned, regardless of its origin in the UK. Requirements related to the use of goods are not within the scope of the mutual recognition principle. If the requirement instead relates specifically to the sale of coal or peat, the interaction with mutual recognition is slightly more complex and depends on whether the requirement in question counts as a relevant requirement for the purposes of mutual recognition. Broadly speaking, mutual recognition captures requirements that are intrinsic to the good itself, such as requirements for the composition of the good, whereas non-discrimination captures, among other things, requirements for the circumstances or manner in which a good can be sold. I clarified these matters in detail in a letter to the noble Lords, Lord Purvis and Lord Fox; it is in the House Library, I think, if Members require further details.

My noble friend Lord Randall asked me about the situation in the EU and whether we could ban the sale and use of such things. As noble Lords know, the machinery in the EU is wholly different: for example, there are technical notification requirements through which a member state may be delayed in implementing its legislation; or, indeed, the European Commission may step in and open negotiations on a harmonising measure. Any derogation applied by a member state is open to challenge, of course; the Scottish Government had to fight very hard to get their minimum unit alcohol pricing accepted.

The system established under this Bill is different. Pricing and other manner of sale requirements are totally out of scope. Furthermore, requirements governing how a consumer can use a good that may originally have been caught by Article 34 of the Treaty on the Functioning of the European Union are also totally out of scope.

The noble Baroness, Lady Ritchie, asked whether the Bill is a threat to devolution. No: the proposals are designed to ensure that devolution can continue to work for everyone. All devolved policy areas will stay devolved. The proposals ensure only that there are no new barriers to UK internal trade.

The noble Baroness also asked about the Interparliamentary Forum on Brexit. Of course, the clue is in the name: it is an interparliamentary forum. Such decisions are for the legislatures rather than the UK Government to take forward directly, so it is not my place to comment on that.

For all the reasons I have set out, I hope the noble Lord feels able to withdraw his amendment.

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Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I am grateful for what the Minister said in referring to the noble Baroness, Lady Boycott, and to his correspondence with my noble friend Lord Fox and me.

I consulted the House of Lords Library on how the Minister’s letter referring to the sale of coal—not its use—interacts with the Air Quality (Domestic Solid Fuels Standards) (England) Regulations, which this House passed on 7 October and which are the governing legislation. The regulations specifically ban the supply and sale of coal and wet logs in England. One concern is that the Bill would not ban such sales if the goods originated in Wales, Scotland or Northern Ireland, where bans are not in place. That is clear; in fact, the Minister’s letter confirmed that this issue falls within the scope of mutual recognition. In addition, the other terms of the regulations bring this issue within the scope of indirect discrimination.

However, more concerning is that the regulations have been made but are not yet in effect—they come into effect on 1 May 2021—so the Bill will take effect before them. That is a requirement under this legislation, so the regulations the House passed banning the sale of coal and wet logs in England will have no effect because they are now within the scope of the Bill. Clause 5(3) states:

“A relevant requirement … is of no effect”.


Can the Minister clarify that, regardless of whether this is allowed or not, the ban in England will have no effect because of this legislation?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

Again, it is about the difference between sale and use. England can proceed to ban a sale in England but if the sale is allowed in Wales, it could still take place under the mutual recognition principle; but, presumably, use would be prohibited. My letter explains this in great detail.

Lord Randall of Uxbridge Portrait Lord Randall of Uxbridge (Con) [V]
- Hansard - - - Excerpts

I do not want to labour the point, but I am a little dense on this issue. As I understand it, my noble friend is saying that you could ban the use but not the sale of coal or peat, which is my particular interest. I wonder how that will be affected. I am sorry to labour this point—I am sure my noble friend has lots more important things to discuss—but I would be grateful for any elucidation he can give.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My noble friend is essentially right, but it would depend on whether it was legal for the good to be sold in the other nations of the United Kingdom. Again, the difference between sale and use is the important distinction here.

Lord Lexden Portrait The Deputy Speaker (Lord Lexden) (Con)
- Hansard - - - Excerpts

I call the noble Lord, Lord Wigley, to conclude the debate.

Lord Wigley Portrait Lord Wigley (PC) [V]
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My Lords, first, I thank the dozen or so noble Lords who participated in this debate, which was very focused and has raised a number of issues that will need to be taken further. I was grateful to the noble Baroness, Lady Boycott, for introducing her amendment, many parts of which overlap with mine; I certainly support her amendment in its own right, irrespective of how it interplays with mine. I am sure that she and other colleagues will accept the principle of product miles being an important element in the consideration of environmental and economic policy.

I was taken by the references the noble Lord, Lord Liddle, made to regional policy in England. This was touched on by the noble Baroness, Lady McIntosh, as well. That is absolutely valid, because circumstances vary from area to area, certainly between the south-east and the north of England, and between other areas. Where there are different circumstances one needs different policies and mechanisms of government that can deliver those policies in line with the areas’ requirements.

Therefore, in advocating these powers for the three devolved nations, I also accept entirely the argument that there should be an ability to fine tune policy for the regions in England. It is for those regions to stand up and be counted, and to demand the powers to do so. After all, the facility in Wales of having our own Government has enabled us to take new initiatives that have helped to solve some problems—not all of them, but some of them. The noble Baroness, Lady Bennett, whose support and that of the Green group I welcome for both amendments, has underlined on a number of occasions the need for there to be devolution to the regions of England.

I listened carefully to the comments made by the noble Lord, Lord Empey, in particular, who raised a question that I do not think has been fully answered by the Minister regarding how the use of orders might be undertaken in Northern Ireland. That leads me on to the question, in responding to the Minster’s argument that there will be a separate policy statement on procurement reform, of whether that new policy and the legislation associated with it will be driven through by statutory instrument. We might be in a position where Wales and Scotland could, like Northern Ireland but for different reasons, be subject to that sort of policy.

What I want from the Minister before I conclude this short debate is some assurance that, in drawing up the consultation and procurement proposals he has in mind for a later stage, that will not go through the back door, which he is not admitting to doing through the front door in this Bill. I would be grateful if he could respond specifically on that question: that the procurement reform will not undermine the thrust of the argument we have had in the debate. I would be grateful for his comments on that before I conclude.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

The Government intend to deliver measures on procurement through a wider package of procurement reform. The aim is for primary legislation to be made in the second Session, as I said in my answer. I hope that is enough reassurance for the noble Lord.

Lord Wigley Portrait Lord Wigley (PC) [V]
- Hansard - - - Excerpts

I am grateful to the Minister for clarifying that this will happen in the second Session, but I very much hope that it will not open a totally different view of the devolved competencies and the balance of powers needed not only between the three devolved nations, but regionally in England. I hope that that can be given greater thought.

I will not press the amendment, but I believe that the approach encapsulated in it can be combined with some of the other amendments we have already passed that will be part of the revised Bill that goes back to the House of Commons. If that is the case, there may be opportunities for Welsh MPs to pick up this matter in the House of Commons so that we can come back to it again when we consider how the House of Commons responded to the Bill as it finds it. Having said that, I beg leave to withdraw the amendment.

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Moved by
29: After Clause 12, insert the following new Clause—
“Duty to review the use of Part 1 amendment powers
(1) In this section “the Part 1 amendment powers” are the powers conferred by sections 6(5), 8(7) and 10(2) (powers to amend certain provisions of Part 1).(2) The Secretary of State must, during the permitted period—(a) carry out a review of any use that has been made of the Part 1 amendment powers,(b) prepare a report of the review, and(c) lay a copy of the report before Parliament. (3) In carrying out the review the Secretary of State must—(a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland;(b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4; and(c) assess the impact and effectiveness of any changes made under the Part 1 amendment powers.(4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.(5) If any Part 1 amendment power has not been used by the time the review is carried out, this section has effect—(a) as if the report required by subsection (2), so far as relating to that power, is a report containing—(i) a statement to the effect that the power has not been used since it came into force, and(ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and(b) as if the requirements of subsection (3) did not apply in relation to that power.”Member’s explanatory statement
This new Clause would require the Secretary of State to carry out a review of, and to lay a report to Parliament about, the use made of the amendment powers in Part 1. The review cannot start within three years of Royal Assent, and the steps required would need to be completed within five years.
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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
- Hansard - - - Excerpts

My Lords, this has been an interesting debate. It has revealed many gaps in our knowledge and understanding of the Bill, which, perhaps, is very comfortable for the Government. I would go a bit further than some of the previous speakers and say that the Government are making heavy weather of this part of the Bill, not displaying to their best advantage the knowledge and understanding they should have in this area. I presume that the starting point must have been that if there is to be an internal market, it must be regulated so that it works well. It is therefore necessary for the legislation to have regard to our services sector, which, as the noble Baroness, Lady Neville-Rolfe, said, accounts for some 65% of our economy. If that is right and it is such an important part of our economy, why is this Bill so sketchy about it? Do the Government not know much about our services sector? Is it not important that we get that right? The noble Baroness, Lady Noakes, again put her finger on it: is this just a protection against possible future unknowns? If so, does that explain why there is so little in the Bill itself to reflect that?

Others have made these points very well. The noble Lord, Lord Purvis, was right to say that we have to think harder than the Bill does about the way modern companies operate in providing goods. Companies are rarely without a service component, and the Bill does not deal with that bipartisan, hybrid approach. The noble Baroness, Lady Bowles, asked about services that are licensed or rented. In the virtual space of the internet, one is rarely talking about purchase. One is talking about usage, and there is nothing here about intellectual property, copyright or associated interests. What about those companies? Do they get affected by this legislation?

What sort of world are we living in if our Bills cannot embrace the fact that, in the digital world, services are not delivered by companies based in specific parts of the UK? That point was made by a number of speakers. Most operate in more than a single place, and it would be difficult to drill down to a point where the physical geography can be identified—the “brass plate” question that was raised earlier.

At the end of the day, it would be more helpful to the House if the lists given in Schedule 2 did not try to discriminate against services. The services listed in the schedule are not covered by the Bill, and it would be more of a challenge but more interesting for us if the Bill listed the services to which the Bill does apply, thereby making it easier to discuss this issue. I challenge the Minister to write to us before Third Reading with a comprehensive list of the services he believes are caught by this Bill and to explain to us, in simple language that we can understand, the impact the Bill will have if implemented.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank my noble friend for tabling this amendment, which seeks to clarify the extent to which we have considered how the provisions of the Bill in respect of services will work in practice. I shall endeavour to do my best to answer my noble friend’s concerns, because I know that she appreciates and promotes just how critical the services sector is to the United Kingdom, and I share that view. It is vital, constituting more than 80% of our GDP and four out of five jobs nationwide.

The principles of mutual recognition and non-discrimination in Part 2 underpin an internal market framework which will limit the emergence of new barriers following the return of powers from the EU. This will support UK businesses trading services in other parts of the UK, and authorities regulating these services. The Bill will complement the existing services regulatory framework while building in certainty for businesses and regulators.

The mutual recognition principle means that businesses authorised to provide services in one part of the United Kingdom will not need to satisfy further authorisation requirements to provide those services in the other parts of the United Kingdom. This principle of mutual recognition applies to authorisation requirements. It does not cover matters such as non-mandatory membership of organisations, which cannot prevent a service provider from offering a service but which might be desirable to join for other reasons.

A similar form of mutual recognition already operates as part of the existing UK-wide regulatory framework for services under the Provision of Services Regulations 2009. Regulators complying with that legislation will already be subject to the principle of mutual recognition. Similarly, the non-discrimination principle is a fundamental safeguard for businesses, ensuring equal opportunity for companies trading in the UK regardless of where in the UK that business is based, from where it provides services or where its staff are based.

As my noble friend Lady McIntosh highlighted, with the non-discrimination provision, regulators have until now had to follow rules in the Provision of Services Regulations 2009 which prevent discrimination towards service providers from other European Economic Area states. These rules will be revoked at the end of the year when the transition period comes to an end, as they will no longer be relevant to the UK’s situation. It is only right that rules that have previously prevented discrimination towards businesses from the other EEA states should now be applied to ensure the continued flow of services across our United Kingdom.

To help provide clarity, Clause 16 sets out a list of requirements and provisions that are neither regulatory nor authorisation requirements and therefore are not covered by the principles in Part 2. First, those requirements dealt with in other parts of the Bill—namely the mutual recognition principle in Part 1, which relates to goods, and provisions covered by Part 3, on professional qualifications—are not within scope of Part 2. This is because it is not desirable for one set of requirements to be subject to several rules from different parts of the Bill.

Secondly, existing requirements are out of scope because Part 2 applies only to new or substantively modified requirements that come into force, or otherwise come into effect, after this section comes into force. However, for the mutual recognition principle only, existing requirements will be brought within scope of the Bill where a corresponding authorisation requirement in another part of the UK introduces a new or substantively changed requirement.

Thirdly, a requirement which applies both to service providers and non-service providers is not in scope of Part 2. This part of the Bill is concerned only with the requirements which seek to regulate service providers and not all requirements which might affect service providers.

Finally, there are administrative requirements on service providers that we consider are reasonable in all circumstances, and therefore they are also not in scope of this part. Such administrative requirements could include, for example, where a service provider may be required to notify a local regulator of their presence, or where they are required to provide proof that they are in fact authorised to provide that service in another part of the UK. These requirements are necessary for regulators to continue operating effectively under the rules in this part, but it is our view that they are limited enough in scope so as not to create any unnecessary barriers to trade.

I can therefore assure my noble friend that the Government have considered carefully how the provisions in Part 2 will work in practice, and that Clause 16 is an essential part of their operation.

My noble friend asked whether penalties apply to businesses that are excluded from the Bill. If a given matter is out of scope of Parts 1 to 3, it is also by definition out of scope of the OIM’s functions and responsibilities.

My noble friend Lady McIntosh raised the four weeks’ consultation, as did a number of other noble Lords. The consultation followed the principles for a government consultation and represented an ambitious plan to engage businesses of all sizes across all four nations, as well as many academic experts and representatives of the devolved Administrations.

My noble friend Lady Neville-Rolfe asked also about Schedule 2, which lists a number of services with the aim of reflecting those outside the scope of the Provision of Services Regulations 2009, which is the current services framework. The Government also recognise that it is appropriate for legal services to be excluded from the provisions on the mutual recognition of services to reflect the separate legal systems in England, Wales, Scotland and Northern Ireland.

The noble Lord, Lord Purvis, asked whether service providers from the Isle of Man were subject to the measures in Part 2. The answer is no. Part 2 applies only to businesses and individuals that a have a permanent establishment in the United Kingdom as defined by the Corporation Tax Act 2010, which does not include of the Isle of Man. It is also the case for all Crown dependencies.

The noble Lord also asked when the services principles apply and when the goods principles apply. The services principles apply only where the goods principles do not. Only one set of principles will apply as to a particular requirement.

I hope that I have answered the questions of noble Lords and of my noble friend. I hope that she feels able to withdraw her amendment.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
- Hansard - - - Excerpts

I thank noble Lords for an interesting debate and I am grateful for the support of my noble friend Lady McIntosh, the noble Baroness, Lady Bowles, and, of course, my noble friend Lady Noakes, who rightly pointed out the probing nature of this amendment, which I obviously do not seek to press. She also said that it was right that we include the services sector in the internal market, which is obvious from its very scale—a point that she, the noble Lord, Lord Stevenson, and the Minister emphasised—I think that it is about 80% of GDP. The Minister was also right to emphasise the value of mutual recognition and the loss of the EU-based services regulations of 2009, which to some extent we are trying to replace.

The single most important thing about the services element of the Bill, in Clause 16, is to understand the Government’s intentions, particularly in view of the minimal nature of consultation in framing it. My noble friend Lord Naseby was right to emphasise the importance and use of consultation. He also asked a question about the proposed registers which I am not sure we got a complete answer to.

The trouble is, we still do not know why these provisions are needed in individual cases—I gave some examples that I did not really get an answer to, such as hairdressers and other businesses—and why they vary from sector to sector. As the noble Lord, Lord Purvis, said, I am an optimist—I have been a strong supporter of the Government on this Bill against the advice of respected friends—but perhaps the Minister can kindly reflect on whether he can do anything further on services, with services now being so linked to goods as we have all agreed, to allay my fears. Some sectors, from property to restaurants, appear to face new regulations, possibly draconian, without much of awareness of it. The noble Lord, Lord Stevenson, suggested a letter outlining what was covered within the services sector. Perhaps the Minister could reflect a little further on how we might communicate this and reassure people about the value of these provisions in creating a single market with mutual recognition, which I strongly support. But we need to make sure that people understand what their duties are and that such duties are not overly draconian and will be sensibly enforced. I beg leave to withdraw the amendment.

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Moved by
36: Clause 17, page 12, line 45, at end insert—
“(5) Before making regulations under subsection (2) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending Schedule 2 (which contains exceptions from the rules about market access for services).
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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
- Hansard - - - Excerpts

My Lords, the general theme here, I suggest, is that we need the Minister to respond very clearly and precisely on this matter. My noble friend Lord Foulkes used the rather nice and elegant Scottish word “fankle” to describe where we are at, suggesting that this needs to be undone. I was going to use the Gaelic word “bùrach”. I suddenly thought that Hansard might have difficulty with it, so I checked it on a handy electronic device close to me—and came up with a rather interesting extension, which I leave with the Minister. You can use the word “bùrach”, which in Gaelic means a “right mess”, but I think a more appropriate term in this case is a “clusterbùrach” which, as the article on my device goes on to say, is

“a Scottish term for a hopelessly intractable mess made by hapless politicians.”

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

The noble Lord, Lord Stevenson, has been very helpful, adding to my knowledge of grammar. The north-east version of that would be “cluster”, followed by a word I cannot use in the House, which would not be “bùrach”. If only I had known, I would have brought my thesaurus along to aid noble Lords in their pursuit of these matters.

These amendments seek to ensure that the drafting of the non-discrimination clauses means that the discriminatory requirement is of no effect only to the extent that the requirement discriminates against the service provider in question. However, I am pleased to tell my noble friend Lady McIntosh that Amendment 39 is already addressed by this clause and is therefore unnecessary. In the case of Amendment 40, as this clause concerns indirect discrimination in the regulation of services, the amendment as drafted would make Clause 20 entirely inoperable and leave indirect discriminatory requirements to take effect.

I start with Amendment 39, which obviously concerns direct discrimination. Direct discrimination is where a regulatory requirement treats a service provider less favourably than other service providers; the reason for that is their connection, or lack of connection, to a certain part of the United Kingdom. Clause 19 already limits the application of these measures—this addresses the point made by the noble Lord, Lord Purvis—so that only the affected service provider may benefit from the requirements having no effect. While I understand my noble friend’s concern, the definition of a regulatory requirement already ensures that only the offending requirement is of no effect. This amendment therefore replicates what is already drafted in Clause 19, so I am sure she will understand that I am unable to accept it.

Turning to Amendment 40, the test for indirect discrimination requires that a requirement is not directly discriminatory, and the amendment would mean that indirectly discriminatory requirements are of no effect only to the extent that they directly discriminate. This would render Clause 20 entirely ineffective. Therefore, I am sure that my noble friend will accept that I cannot accept either of her amendments for the reasons I have set out, and I hope that she will agree to withdraw them.

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Moved by
45: Clause 20, page 14, line 41, at end insert—
“(9A) Before making regulations under subsection (8) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending the “legitimate aims” in Clause 20 (which can mean that provision does not count as indirectly discriminatory against service providers).
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Moved by
47: After Clause 20, insert the following new Clause—
“Duty to review the use of Part 2 amendment powers
(1) In this section “the Part 2 amendment powers” are the powers conferred by sections 17(2) and 20(8) (powers to amend certain provisions of Part 2).(2) The Secretary of State must, during the permitted period—(a) carry out a review of any use that has been made of the Part 2 amendment powers,(b) prepare a report of the review, and(c) lay a copy of the report before Parliament.(3) In carrying out the review the Secretary of State must—(a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland; (b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4; and(c) assess the impact and effectiveness of any changes made under the Part 2 amendment powers.(4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.(5) If either of the Part 2 amendment powers has not been used by the time the review is carried out, this section has effect—(a) as if the report required by subsection (2), so far as relating to that power, is a report containing—(i) a statement to the effect that the power has not been used since it came into force, and(ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and(b) as if the requirements of subsection (3) did not apply to that power.”Member’s explanatory statement
This new Clause would require the Secretary of State to carry out a review of, and to lay a report to Parliament about, the use made of the amendment powers in Part 2. The review cannot start within three years of Royal Assent, and the steps required would need to be completed within five years.
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Moved by
51A: Clause 25, page 19, line 38, at end insert—
“(7) Section 22(2) does not apply in relation to provision that limits the ability to practise the profession, or any profession, of school teaching.”Member’s explanatory statement
This amendment adds school teaching to the professions the regulation of which is excluded from Clause 22.
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Moved by
52: Clause 29, page 23, line 16, at end insert—
“(2A) That objective includes, in particular, supporting the operation of the internal market—(a) in the interests of all parts of the United Kingdom, and(b) in the interests of consumers of goods and services as well as other classes of person with an interest in its operation.(2B) The CMA must also, in carrying out its functions under this Part, have regard to the need to act even-handedly as respects the relevant national authorities.”Member’s explanatory statement
This amendment would set out in more detail the considerations that the CMA (including while acting through the Office for the Internal Market) must have regard to in exercising its functions under Part 4.
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, noble Lords will have noticed that we have listened carefully to the many constructive points put forward in Committee as well as from the devolved Administrations on the provisions in the Bill to establish the office for the internal market, tasked with overseeing the smooth operation of the internal market. As set out in my recent letter to colleagues on government amendments for Report, we have made a number of important changes throughout Part 4 to make it clear in statute that the OIM will work in the interests of all parts of the United Kingdom and for all Administrations on an equal basis. I believe that these changes take into careful consideration the points raised in Committee and put beyond any doubt concerns around the consumer focus of the OIM—I hope that the noble Baroness, Lady Hayter, will welcome this—and the devolved Administrations’ involvement in the OIM’s governance arrangements.

Amendments 56 and 57 ensure that there is an enhanced role for the devolved Administrations in OIM appointments, requiring Ministers to seek consent with all Administrations within a one-month timeframe. This builds on the model proposal developed by the Welsh Government and tabled by the noble Baroness, Lady Finlay, previously. We believe that this strikes a delicate balance by ensuring that the OIM can operate independently and that all Administrations can have a meaningful input in the appointments process. At the same time, we have been clear that it is essential that the OIM operates independently and at arm’s length from Ministers from all Administrations. Therefore, we do not believe that reserving the right for each Administration to make appointments to the CMA board as set out in Amendment 54 is the correct way forward. Likewise, it is important that appointments are made through fair and open competition, which is what our amendments ensure.

We believe that Amendment 57 and our changes made to Schedule 3 ensure a fair, independent and equitable process for all Administrations. It will ensure that consensus is always a first preference, but recognises that, if it is not reached, appointments can still proceed after an appropriate time has elapsed. This represents a pragmatic way forward and avoids the risk of prolonged deadlock over appointments that would prevent the OIM fulfilling its duties under the Bill.

We agree with previous arguments in Committee that all OIM appointees should reflect a range of expertise from all parts of the United Kingdom. That is why we have tabled Amendment 55, which clarifies this in the Bill, making clear the desirability that panel members have a variety of skills, knowledge and expertise. It is important to remember that the OIM will be a neutral custodian of the UK internal market through its non-binding reporting, advisory and monitoring functions. If there are potential concerns in future about how the OIM conducts its duties, Amendment 61 ensures that the CMA’s annual plans, proposals and performance reports are laid before the devolved legislatures as well as Parliament, ensuring equal scrutiny and oversight of these developments, which can be discussed between Ministers from all Administrations where that is appropriate.

Finally, I am aware that there has been considerable interest in this House in ensuring that the OIM operates in the interests of consumers. We have listened carefully to these discussions and are confident that our amendments throughout Part 4 resolve the concerns expressed and put it beyond all doubt that the OIM will operate in the interests of UK consumers.

For all the reasons I have set out, I hope that noble Lords can accept the Government’s amendments and consequently will not press their own. I beg to move.

Lord Thomas of Cwmgiedd Portrait Lord Thomas of Cwmgiedd (CB) [V]
- Hansard - - - Excerpts

I shall speak to Amendment 54 but, before doing so, I thank the Minister for the substantial progress that has been made in relation to the office for the internal market, and for the recognition that it is necessary for the strength of the union and for equality and fairness between the people of the four nations of the United Kingdom that that office has representations from all four nations. However, the purpose of Amendment 54 is that that principle should be applied to the Competition and Markets Authority. This is a non-ministerial department with very substantial powers, which it has exercised since its creation in 2013, but Part 4 of the Bill gives it further and more substantial powers and a role in the operation of the internal market. What precise form those powers will take may ultimately depend on further changes to the Bill, but there can be no doubt that the powers are substantial.

Amendment 54 is therefore a modest amendment, seeking to build upon what the Government have agreed to in relation to the office for the internal market. At present, the Competition and Markets Authority has its chair and members appointed by the Secretary of State and the panels under the Act. But it seems that there is no reason at all why the principles that have been brought to bear for the office for the internal market should not be applied to the CMA itself. As I shall try to explain in a moment, it is essential that the CMA should have representatives of each of the four nations.

It was said at a previous sitting that this would be politicising the body. That is not so. First, the CMA is an independent, non-ministerial department, and people appointed by the Secretary of State, including its chair, are independent. The persons under this provision would be independent in exactly the same way. They are not going to be representatives of the devolved Governments in exactly the same way that the persons appointed by the Secretary of State are not representatives of Her Majesty’s Government but independent people.

Secondly, it is very important to ensure that now that the CMA will have an important role in the internal market, it will have at least one member from each of the nations who understands the issues in the internal market as it affects that nation. Thirdly, the amendment will not politicise the position in any way because the appointment will be by an independent public appointment process, in the same way that the chair and members appointed by the Secretary of State are appointed by an independent appointments process. That is the purpose of the first amendment.

Amendment 58, which is also in this group, is now covered by government Amendment 57 if Amendment 54 is agreed to. Amendment 59 is agreed to be consequential on Amendment 54. Before explaining briefly my reasons for tabling Amendment 54, I wish to make it clear that at the appropriate time this evening, unless the Minister is prepared to come forward with some alternative proposals, I propose to take this amendment to a Division.

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Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
- Hansard - - - Excerpts

I join others in thanking the Minister for some significant moves in the amendments that he has introduced today. As others have said, it is testament to his having listened. He sometimes thinks that means “listened at length”, but he listened, considered and responded, and we welcome all the changes. I am particularly pleased about the acknowledgement in the amendments of the interests of consumers in the mapping out of the new internal market. The House will be pleased about the recognition of the need for experience across the kingdom in the appointment of the OIM panel and the need to seek the consent of the devolved authorities to such appointments.

Similarly, we welcome, perhaps unsurprisingly, the new requirement for the CMA to lay its key documents before all four legislatures. It is possible that they already do it, albeit perhaps as a courtesy rather than a legal requirement. We also strongly welcome Amendments 56 and 57, which require devolved authorities to give their consent within a month to appointments to the OIM panel. We like that—consent within a month; we have heard it before. We pinched the idea from the Minister’s words, but it is a good one. As we proposed in our amendments, if the Government proceed with an appointment despite consent not being forthcoming, they will have to explain why they are doing so. Therefore, we will not move Amendment 59.

However, the Minister will not be surprised to hear that, although we welcome these changes, we would like to nudge them a little further. On Wednesday, as others have said, we will seek to move the OIM out of the CMA. Just in case it remains in the CMA, it is vital, as the noble and learned Lord, Lord Thomas of Cwmgiedd, and others have said, that the CMA, in accepting this new role, amends its structure to accommodate the change. It is impossible to think of any other national organisation, when its remit changes, not revisiting its governance and appointments. It should not just continue with business as usual when taking on a whole new responsibility.

Indeed, although we welcome Amendments 56 and 57, we were surprised that they did not apply to the CMA as well as to the OIM panel. For an overarching body with a purview of the development of the new internal market architecture, not having to feel the pulse of, understand and have input from the constituent parts is a little odd, to say the least. For all its board members to be appointed by just one of the four Governments is particularly hard to understand, because it is a body covering the competences of all four Governments. If it was covering only the reserve competences, one could understand, but it will cover powers that affect the area of all four Governments.

As was said by, I think, the noble Baroness, Lady Noakes, if you are appointed by one place you somehow feel like a representative from it. I must say something about other boards and committees that I have sat on. It may not be a board of this nature, but the National Consumer Council included someone from the Northern Ireland Consumer Council, as I think it was called, someone from the Welsh Consumer Council and someone from the Scottish Consumer Council, but once they got on the board, they had responsibility to it as a board member. Just because we brought in someone with different responsibilities, it did not suddenly make them a representative. Similarly, the chairs of the different sub-committees of the Financial Reporting Council sat on the board. They came with that experience but, once they sat on the whole-council board, their responsibilities included that.

It is slightly hard to say that just because people are appointed by different Governments, they are then answerable only to them. Given that they would be appointed by only one Government, and given that people are saying that if you are appointed by the Welsh Government, you are then a representative of the Welsh Government, surely if you are appointed by the UK Government you also are not independent. It does not quite make sense to me.

We will shortly vote on Amendment 54 in the name of the noble and learned Lord, Lord Thomas. The Opposition will be happy to support it, to ensure that the CMA really does act on behalf of the whole of the United Kingdom.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I can be brief, on the basis that I went through the amendments in detail in my opening remarks. I thank all noble Lords who took part in this debate very much.

I say to the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Thomas, that the Bill is not a smonach at all. As I am from the north-east, I can say that, despite all this, I still consider them both marras and not at all workie tickets—I suspect that all this is driving our Hansard copywriters into a bit of a radgie.

I reiterate that my amendments to Part 4 will ensure beyond doubt that the OIM will operate in the interests of both UK consumers and all four Administrations on an equal basis. I thank my noble friend Lady Noakes in particular for her important observation that the CMA board appointments are there first and foremost to ensure that the organisation operates effectively.

I wish to emphasise strongly that changing the wider CMA structures would be wholly unnecessary and create a deeply unhelpful precedent in so far as DA appointees would have a say on reserved matters. In contrast, the OIM panel will undertake the work of the OIM. It is in that context that the government amendments have been brought forward. I believe that this directly addresses the points made in this House, ensuring that the devolved Administrations have greater involvement in OIM appointments. I therefore hope that the House will be able to accept these amendments.

There were a couple of questions. The noble Baroness, Lady Bowles, asked me to define the panel requirements. Amendment 55 makes clear the Government’s view that a balance of expertise in the round on the panel from which task groups are drawn is important. Schedule 3 makes it clear that such task groups must

“consist of at least three members”,

and therefore may contain more. We have argued consistently against a hard distinction between panel members and assigning specific members to specific parts of the UK. In my view, it would be a failure if there was seen to be an “English panel member” and a “Welsh panel member” who are then somehow adversarial.

Finally, I say in response to the noble Lord, Lord Bruce of Bennachie, that I have consistently made it clear that the functions of the OIM cover advice, monitoring and reporting only and cannot force regulatory change of any kind.

With those remarks, I hope—though without much expectation—that noble Lords will not press their amendments and I commend those in my name.

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Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB) [V]
- Hansard - - - Excerpts

Does the Minister agree that good governance requires a balanced board but it also requires that each appointee fulfil the person specification as set out to ensure such balance, that they declare any interest in a relevant discussion and that they may have to withdraw during that discussion? That is all laid out for the running of an open and transparent process within a board as well as for an open and transparent appointments process. Does he further agree that it would be an incredibly narrow person specification that expected people to have only one skill, relating only to their devolved Administration experience, and that they would be coming forward with a broad range of skills to complement a balanced board?

Lord Callanan Portrait Lord Callanan (Con)
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There were a number of questions there, but of course I believe that there should be an open and transparent appointments process, and that individuals appointed should possess a broad range of skills—that seems self-evident.

Amendment 52 agreed.
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20:17

Division 2

Ayes: 285


Labour: 126
Liberal Democrat: 76
Crossbench: 62
Independent: 13
Conservative: 2
Green Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 224


Conservative: 197
Independent: 11
Crossbench: 11
Democratic Unionist Party: 5

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Moved by
55: Schedule 3, page 47, line 27, at end insert—
““(2ZA) In making appointments under paragraphs (iv) and (v) of sub-paragraph (1)(b) the Secretary of State must have regard to the desirability of securing that— (a) a variety of skills, knowledge and experience is available among the members of the OIM panel, and(b) there is an appropriate balance among the members of that panel of persons who have skills, knowledge or experience relating to the operation of the United Kingdom internal market in different parts of the United Kingdom.”Member’s explanatory statement
The amendment would require the Secretary of State to have regard to the desirability of having a variety of skills, knowledge and experience in the Office for the Internal Market panel and for a balance between members with specific skills, knowledge or experience in the internal market as operating in different parts of the United Kingdom.
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Moved by
61: After Clause 37, insert the following new Clause—
“Laying of annual documents before devolved legislatures
(1) Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (the Competition and Markets Authority) is amended as follows.(2) In paragraph 12(3)(annual plan to be laid before Parliament), for “Parliament” substitute “—(a) Parliament,(b) the Scottish Parliament,(c) Senedd Cymru, and(d) the Northern Ireland Assembly”.(3) In paragraph 13(2)(proposals for annual plan to be laid before Parliament), for “Parliament” substitute “—(a) Parliament,(b) the Scottish Parliament,(c) Senedd Cymru, and(d) the Northern Ireland Assembly”.(4) In paragraph 14(3)(a)(performance report to be laid before Parliament), for “Parliament” substitute “—(i) Parliament,(ii) the Scottish Parliament,(iii) Senedd Cymru, and(iv) the Northern Ireland Assembly”.”Member’s explanatory statement
This new Clause would require the CMA to lay its annual plan, proposals for its annual plan and its performance report before the devolved legislatures as well as Parliament.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020

(3 years, 4 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 150-III(Rev) Revised third marshalled list for Report - (23 Nov 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
62: Clause 39, page 31, line 30, leave out “such” and insert “—
(a) each relevant national authority, and(b) such other”Member’s explanatory statement
This amendment would provide that the domestic administrations must be among the bodies consulted by the CMA in relation to its policy on enforcing information-gathering notices.
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Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, during the Bill’s progress through Parliament, we have engaged extensively to ensure that it, and the Office for the Internal Market in particular, work for all parts of this country. We have always been clear that the Competition and Markets Authority will ensure the devolved Administrations are consulted on all important matters relating to the OIM. Following significant discussions with our devolved counterparts and noble Lords, we are pleased to introduce these two amendments, which will underscore the importance of the devolved Administrations in the operation of the OIM. The Government have emphasised throughout the introduction of the Bill that the UK internal market needs to work for all parts of this country, and these amendments are a testimony to this aim.

Amendment 62 ensures the CMA must consult the devolved Administrations when preparing or revising its policy on enforcing information-gathering notices. Alongside this, Amendment 63 will require the Secretary of State to consult the devolved Administrations over the level of fines that can be placed on bodies that do not comply with a CMA request for information. Both amendments give the devolved Administrations a significant say in the key operations of the OIM. These amendments will put beyond doubt this Government’s commitment to ensuring that the interests of the devolved Administrations are reflected in the governance of the OIM and that the OIM will continue to meet the interests of all parts of the United Kingdom.

I turn now to Amendments 62A, 63A and 63B, which seek to alter the CMA’s ability to effectively gather information. I reassure the House that, as highlighted in previous debates on the Bill, these penalty powers in Part 4 will not be commenced unless there is a clear and credible need for them—for example, to ensure that the OIM can gather credible and accurate information for its reporting and monitoring purposes. I believe this goes some way to addressing many of the concerns of the noble Baroness, Lady Bowles, regarding the design of the information-gathering and enforcement regime. This will ensure that such a regime will be well considered, based on clear evidence of need and proportionate to fulfil the OIM’s duties. I emphasise that the need for accurate, and up-to-date information is essential to ensure that the OIM’s reports and advice are credible, evidence-based and meaningfully capture the UK internal market landscape.

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Moreover, the Common Frameworks Scrutiny Committee is aware that, in the process of completing the task of making the frameworks, some—such as nutrition––are already coming up against the requirements in this Bill. No doubt there will be future examples of that emerging in the next few weeks. Will the Minister say, before the Bill progresses further, whether he will seek the advice of the Common Frameworks Scrutiny Committee on this emerging evidence of difficulties, so that we really do make sure that this Bill is not going to undermine but will support the work of the common frameworks?
Lord Callanan Portrait Lord Callanan (Con)
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I thank all noble Lords for their interventions on this subject; I understand the sincerity with which Peers have addressed it. However, as I said in my opening remarks, the amendments on which we have been able to get agreement put beyond doubt that the OIM will closely consult and work with the devolved Administrations on an equal basis, in the interests of all parts of the United Kingdom. These important changes ensure that the OIM’s policy on information-gathering and enforcement, including the level of penalties, will be carefully considered in consultation with the devolved Administrations. This will ensure greater transparency in decision-making and will help ensure that the OIM will be able to gather the accurate information it needs to independently assess and monitor the UK internal market. Of course, the Government have made it clear that reports carried out by the OIM each year will be made available both to this Parliament and to the devolved legislatures.

I reiterate a point I made in previous debates: to be clear, the penalty powers in Part 4 will not come into effect unless there is clear evidence that there is a need to do so in order for the CMA to fulfil its internal market functions. I believe that this provides the necessary assurances that any penalties regime will be proportionate and transparent.

In addressing some of the points made in the debate, I turn first to those made by the noble Baroness, Lady Bowles, and the noble Lord, Lord Fox, on precedent. I can certainly reassure noble Lords that the Bill sets out clearly the maximum limits to the level of financial penalties in Clause 40(6). They do not exceed those which the CMA can currently impose. Penalties and the enforcement regime are based on precedent, as set out in the Enterprise and Regulatory Reform Act 2013. As I mentioned in my opening speech, the justification for these powers is that, without such a deterrent in place, there is an incentive not to comply with information-gathering requests, and that runs the risk of not having completely accurate information supplied to the OIM.

My noble friend Lady Altmann gave the example of the Pensions Regulator. I can say that excluding an entire class of business from information-gathering requirements such as these does not have as firm a standing in precedent as the she suggests. The CMA acting as a reasonable public body will, of course, in all cases, take into account all relevant factors, whether on the face of the Bill or not, in considering how to act and whether to pursue penalties, if they have been commenced at all.

My noble friend Lady McIntosh asked about reasonable excuses. I am not sure whether it was she who asked me a similar question on Report on Monday, but as I said then, the CMA would set out in its statement of policy the clear steps and procedures regarding the enforcement of its information-gathering regime. The penalties will not be commenced until there is evidence that they are called for, and even then they will not be used except as a last resort, whatever the size of the business. The CMA will consult all relevant persons regarding its statement of policy. I am happy to confirm to my noble friend Lady Noakes that, as I said in Committee, the CMA will not be able to issue a financial penalty against—I am pleased to say—either this Government or any UK Government, or indeed the devolved Administrations.

My noble friend Lady McIntosh mentioned consultations. The Bill requires that Ministers should consult as a matter of fact before they exercise their delegated powers. As is normal for such legislation, it does not spell out in great detail how this must be achieved, but we will engage with the devolved Administrations as part of the process of normal policy development, by, for example, sharing draft SIs and publications, and co-operating on public-facing events wherever that is possible, and, in any case, more formally before a decision is made.

For all of the reasons that I have set out, I hope that noble Lords will accept the amendments that I have tabled and that the noble Baroness will not press hers. However, for the benefit of the noble Lord, Lord Fox, and to be absolutely clear and to put the matter beyond doubt, I am afraid that I have gone as far as I can go on these matters and I will not be reflecting further before Third Reading. Therefore, if the noble Baroness wants to test the opinion of the House, she should do so now.

Lord Lexden Portrait The Deputy Speaker (Lord Lexden) (Con)
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My Lords, I have received no request to ask the Minister a short question. I shall therefore put the Question.

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14:38

Division 1

Ayes: 155


Liberal Democrat: 80
Crossbench: 54
Independent: 8
Labour: 7
Green Party: 2
Conservative: 1
Plaid Cymru: 1

Noes: 249


Conservative: 200
Crossbench: 27
Independent: 14
Democratic Unionist Party: 5
Ulster Unionist Party: 2

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Moved by
63: Clause 40, page 32, line 19, after “CMA,” insert—
“(aa) each other relevant national authority,”Member’s explanatory statement
This amendment would provide that the other domestic administrations must be among the bodies consulted by the Secretary of State about regulations setting the level of penalties for contraventions of information-gathering notices issued by the CMA.
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16:39

Division 2

Ayes: 323


Labour: 145
Liberal Democrat: 82
Crossbench: 70
Independent: 17
Conservative: 3
Green Party: 2
Bishops: 2
Plaid Cymru: 1

Noes: 241


Conservative: 204
Crossbench: 18
Independent: 12
Democratic Unionist Party: 5

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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I am going to disappoint the noble Lord, Lord Fox, as I will not go through my arguments at length, because they have been made so well by the noble Baroness, Lady Bowles, and the noble Lord, Lord Wigley. I put on record my absolute support for the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, who, while they have comments about the detail of the amendment, support the principle of it. I am grateful to them for that.

It is a simple proposition: the internal market must work and be seen to work for all and, therefore, must have buy-in and support from all. It should not favour one geographical area or country over another. It is important that we do not upset the balance struck in the CMA and its functions. The noble Baroness, Lady Noakes, is right that there may be an adverse impact on the CMA, if it is forced to take on something that is not its primary purpose. Thirdly, the devolved Administrations need to be part of the organisation, its process and appointments.

There are reservations about proposed new subsections (3) and (4) in the amendment. It is beyond our hopes, but perhaps the Minister will consider bringing forward an agreed amendment at Third Reading. If he did, we would support it but, if he will not do that, we will support the noble Baroness if she tests the opinion of the House.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank noble Lords who participated in the debate, particularly for their brevity. This is, I suspect, a simple difference of opinion, but I will give it a go anyway.

In previous groupings we have discussed the detail of how the office for the internal market would be governed, including the composition of its board, and so noble Lords will be delighted that I am not going to go through all that again. I have set out consistently in this House why the CMA was chosen as, in our view, the most appropriate body to undertake the new UK internal market oversight functions. The CMA has an outstanding international reputation as an independent regulator and is already equipped with highly relevant economic expertise, necessary to undertake its new functions in the context of the operation of the UK market. Moreover, the CMA has well-established relationships with all the Administrations, with offices in London, Edinburgh, Belfast and Cardiff. This UK-wide presence will help ensure that the OIM will work in the interests of all parts of the United Kingdom.

However, we have made it clear that some bespoke arrangements for the OIM will be necessary, in recognition of the focus on devolved matters. As provided for in the Bill, the OIM will be able to benefit from the CMA’s existing expertise and operate within its overall framework, while having its own functions and powers, including distinct governance arrangements such as the OIM panel and task groups. The Government have recognised that some degree of separation is vital and have developed proposals for the OIM accordingly. I wish to strongly emphasise that the distinct statutory objective for the OIM, and for the targeted adaptation in the Bill of the CMA’s statutory framework, enshrines this separation from the outset.

On Monday, we had a good debate on the composition of the board and the role of the devolved Administrations in appointments. The Government have taken a number of reasonable and pragmatic steps to secure the appropriate balance between ensuring that the devolved Administrations have a real say and that the appointment process is not held up unduly—that would, of course, be risked by the amendment.

Finally, I would like to discuss in a little more detail how this amendment would seek to propose a new role for the OIM regarding subsidy control. I recognise that the amendment reflects a desire for reassurance on the enforcement of any future UK subsidy control regime. However, we believe that it risks undermining and prejudging the outcome of the forthcoming consultation that we have announced. This consultation will inform our future approach to subsidy control, including the role of oversight and enforcement.

The Government have been clear that the UK will have its own approach to subsidy control; we want a modern system for supporting British business in a way that fulfils our interests. The amendment is therefore premature, as it seeks to confer specific regulatory functions on the OIM in respect of subsidies before the wider details of any legislative UK domestic subsidy control regime, including the appropriate mechanism for oversight and enforcement, have been developed and brought before this House or the other place.

On another point that we will discuss in more depth in our next debate, the Government’s view is that state aid—the EU’s approach to subsidy control—is a reserved matter. Therefore, the effect of the amendment’s provisions for consent from the DAs would be to create unacceptable uncertainty over the extent to which subsidy control is a reserved or devolved competence. As an issue of national importance, it should be treated in the same way as other nationally significant areas of economic policy, which are reserved. Having a single unified approach to subsidy control across the United Kingdom is vital to ensure that we continue to have fair and open competition across our internal market.

Finally, proposed new subsection (4) would require a review of the OIM’s competences within two or three years after Clause 30 enters into force. I recognise the need to ensure that the CMA’s new functions are undertaken effectively, but the broadness of this proposed review is unprecedented and unhelpful.

For the reasons that I have set out, therefore, I am obviously unable to support this amendment. I ask—perhaps more in hope than in expectation—the noble Baroness to withdraw her amendment.

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17:17

Division 3

Ayes: 298


Labour: 139
Liberal Democrat: 82
Crossbench: 50
Independent: 18
Conservative: 3
Green Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 257


Conservative: 206
Crossbench: 29
Independent: 13
Democratic Unionist Party: 5
Ulster Unionist Party: 2

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, like the noble Lord, Lord Purvis, I agree with the case that has been made so well by the previous speakers. I put my name to the amendment put forward by the noble and learned Lord, Lord Thomas, and we would support him if he chooses to divide the House.

It is very simple: we agree that there has to be a UK-wide policy on state aid—or subsidy, if that is what it is to be called. The question that hangs around but never seems to get answered is: why has it not yet been articulated what this policy would be? It cannot be a question of timing. This suggests yet another shroud of mystery that surrounds this increasingly perplexing Bill.

It is certainly a novel way of developing policy for a Government to remove policy that is in force and that everybody knows and understands, increasing the uncertainty and making it more difficult for businesses. However, as the noble and learned Lord, Lord Thomas, said in his opening speech, the statutory instrument removing the current rules—taking us out of the current system that has been operating for a great number of years—has already been laid and will be debated next week, and we will not be able to stop it.

We therefore seem to be heading towards WTO rules, which are not well respected and do not seem to be applied properly, and there is no policing or organisational structure in which they can be dealt with properly. If that is where we are, we would at least have a period of stability during which we can sort out how we want to set up the rules that will apply to the internal market and how, if necessary, they are to be policed. This could all be part of the yet-to-be-announced deal with the EU—and it may be that is the case, because it is clear that this is a significant area of interest within the negotiations. But without any further detail on that, it is hard for us to speculate.

However, as others have said, the Welsh Government have come forward with an extraordinarily generous offer to expedite work on a common framework that relates to state aid and make a voluntary agreement to pause any legislation that would impinge on that in the intervening period. That is almost too good an offer, and I hope that the Minister has an adequate response to it.

Lord Callanan Portrait Lord Callanan (Con) (Con)
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I thank noble Lords who have contributed to another admirably brief debate. We are making good progress this afternoon.

As I outlined in Committee, Clause 44 reserves to the UK Parliament the exclusive ability to legislate for a UK-wide subsidy control regime. I greatly enjoyed the many contributions on this matter. I particularly liked the suggestion of the noble Lord, Lord Purvis, that I should take defeats as a silver lining, which prompts the obvious response that the Liberal Democrats have been defeated in the last three general elections and therefore have some experience of that.

Our debate in Committee on this clause served to highlight that, while some noble Lords might disagree on the approach taken, we all recognise the importance of ensuring that the UK continues to take a clear and consistent approach to subsidy control as we move away from EU state aid rules. The Government have always been clear in their view that the regulation of state aid—the EU’s approach to subsidy control—is a reserved matter. The Government are clear that they want to maximise the economic opportunities available to us when we are no longer bound by EU state aid rules. To achieve this economic ambition, it is important that, as now, we take a coherent approach to the system that governs how public authorities subsidise businesses across the United Kingdom. Reserving subsidy control is the best way in which to guarantee that a single, unified subsidy control regime could be legislated for in future.

In previous debates, there has sometimes been a misplaced conflation between the devolved spending powers and the systems that regulate the potentially harmful and distortive effects of this spending. To be clear, these are two distinct and separate responsibilities. Although the devolved Administrations can and should make spending decisions on subsidies, the wider rules in which they operate are, and should continue to be, consistent across the whole nation. In response to the intervention from the noble Baroness, Lady Randerson, I reiterate that the reservation does not change the devolved Administrations’ position in practice. They have never previously been able to set their own subsidy control regime, as this was covered by the EU state aid framework, but they will continue to make their own spending decisions on subsidies as they do currently.

The effect of the amendment would be to create unacceptable uncertainty regarding the extent to which subsidy control is a reserved or devolved competence. That would potentially give rise to inconsistency if there were different regimes to regulate subsidies across the UK. Ultimately, it could undermine fair and open competition across our internal market and inevitably discourage investment in the United Kingdom, bringing additional costs to supply chains and consumers.

The reservation will enable the UK to design a bespoke subsidy control regime that meets the needs of the UK economy. The Government have been clear that any future domestic regime will operate in a way that works best for all UK businesses, workers and consumers. In the coming months, as I said in Committee, we intend to publish a consultation on whether we should go further than our World Trade Organization and international commitments, including whether further legislation on this subject is necessary.

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Lord Liddle Portrait Lord Liddle (Lab)
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Can the Minister reflect a bit more on what he has just said about treating this issue as a matter for common frameworks? It sounded as though he wanted a co-operative solution to this problem, one that would bring all the devolved Administrations into a common framework. However, at the end, he said that it is not appropriate—but why not? He has not given a satisfactory answer to that question. I remember challenging the noble Lord, Lord True, in an earlier debate at Report, on whether the Government had changed their policy on common frameworks and were no longer taking them seriously. I got a very vigorous shaking of the head from the noble Lord, Lord True. Would this not be a perfect example of how common frameworks were still being taken seriously by the Government, and would it not resolve a real problem that the Government have had?

The Minister talked about unacceptable uncertainty, but frankly, the unacceptable uncertainty about state aid has come from this Government. Mr Dominic Cummings had one view of state aid, as against the traditional Conservative view. That is where the uncertainty came from. Now that he has gone and now that he is out, thank goodness, we have an opportunity to create a sensible common policy. There is a need for balance, and it must be sensible. The best way is through a common framework in co-operation with the devolved Administrations.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I am not sure whether that was a question or a speech in the wrong place—but I take the noble Lord’s point. I think he is getting issues conflated. The common frameworks programme of course is a programme of work with diffuse levels of power and ultimately it is not clear where regulation lies. To resolve those matters on a cross-UK basis, there is no doubt in our mind where the proper operation of these powers is—state aid, or rather subsidy control, is a reserved matter for the UK Government. However, we have said that we want to work collaboratively. We want to work with the devolved Administrations and of course, as we have said, we will consult closely with them on any new policy that we develop and indeed on whether legislation is necessary. But, given my general support for the framework and the Government’s support for the framework programme, I do not believe that it is appropriate for this matter to be included in the framework programme.

Lord Thomas of Cwmgiedd Portrait Lord Thomas of Cwmgiedd (CB) [V]
- Hansard - - - Excerpts

I will be brief, as obviously it would be very unfair if the Welsh were totally to outnumber everyone else in the number of speeches delivered this evening. I thank all noble Lords for their contributions to an interesting, though short, debate.

First, it is very encouraging that there is complete consensus on the need for a single subsidy regime for the internal market. There is no doubt about that. Secondly, there must be a consensus that at the moment this is not something that the UK Government have power over—otherwise this clause would be unnecessary. It is not a reserved matter and therefore under the devolution schemes it is a matter for all the devolved Governments. Thirdly, it is clear that there is no uncertainty. The Government are taking us out of the EU regime, assuming the instrument is passed, and we will go into the WTO regime—so that is the regime for the foreseeable future.

The real question is: are we going to go forward by diktat from Whitehall and Westminster or are we going to go forward by consensus? An obvious way of going forward is a common framework. I regret to say that I cannot agree with the Minister that a common framework is inappropriate. It is absolutely appropriate, because it will cater for the kind of divergence that will be allowed in the subsidy regimes. This is a matter of acute importance to people such as fishermen and those involved in agriculture. We need to know what level of divergence is permissible and negotiate that.

Finally, a decision has to be made on the role of the CMA. I moved amendments earlier this week in relation to the CMA simply because I imagine it will have to be the policeman of this regime. But what is it to be? Is it to be an adviser? Is it to have a central role? Or are things to be laid out in a common framework?

I therefore say that this clause ought to be removed. Get the policy right first. Try it by common framework and let us go forward on that basis. Therefore, I want to take the opinion of the House on the appropriate means of going forward—and the appropriate means is taking this clause out of this Bill.

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18:24

Division 4

Ayes: 315


Labour: 147
Liberal Democrat: 79
Crossbench: 65
Independent: 17
Green Party: 2
Bishops: 2
Plaid Cymru: 1

Noes: 230


Conservative: 195
Crossbench: 18
Independent: 10
Democratic Unionist Party: 5

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Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
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My Lords, I must say that any computer that tries to silence my noble and learned friend Lord Mackay of Clashfern should be carried to the top of the Old Man of Hoy and dropped from a very great height, hopefully with destructive power—unless any environmentalist thinks that that is a serious suggestion; it is a figure of speech. Those who are not familiar with the Old Man of Hoy should understand that it is an extremely high stack in a very beautiful part of the country. It is very hard to climb, too; I have never attempted it—you only have to look at me to see that.

These amendments have difficulties because they would all introduce, in our judgment, a serious risk of the internal market system not being in place at the end of the transition period. That is a serious consideration in our contention. I agree with my noble friend Lord Trenchard, with his great experience of business—indeed, of business with Japan—that a secure, stable and functioning market is part of the bedrock of our union. It is a unionist principle that we should have a common functioning market; I think that that is assented to by almost all of those who have spoken in our debates. Of course, I repeat my personal commitment and this Government’s commitment to the union. My party has always been a unionist party, and we remain as such.

Coming back to the amendments, in our judgment, a considerable delay would undermine business certainty and consumer confidence at a time when it is vital that the economy is able to bounce back in the Covid recovery phrase, about which my right honourable friend the Chancellor spoke so eloquently earlier today.

Amendment 73, as others have said, absolutely underscores the honourable intent of the noble and learned Lord, Lord Mackay of Clashfern. We have had a meeting of minds on that. I am grateful for his kind words; I can certainly assure him that he has been a great influence in securing constructive change, as have other noble Lords in the course of these debates. I can affirm that the union will remain at the heart of the Government’s objectives. I am grateful for his withdrawing the amendment with the comments and, indeed, warnings that he set around that withdrawal because of the clear limitations—I will come on to these—of linking any proposal to the Joint Ministerial Committee.

For that reason, I will move on to Amendment 75, which specifies a process of debate and consent that must be achieved with the devolved Administrations through the joint ministerial council before the market access principles can take effect. This process would add an unacceptable delay to the implementation of the market access principles when the very reason for the Bill that we are here to discuss is to provide certainty to businesses from 1 January 2021, when the European structure falls away. The objective to provide certainty as powers flow back from the European Union is not new or rushed; indeed, efforts have been made to discuss this over a lengthy period. I must remind your Lordships that, sadly, the Scottish Government walked away from the internal market project in spring 2019. However, there has been continuing, positive and helpful engagement at official, and indeed ministerial, level since then. I do not share the pessimism, suspicion or doubt of a number of your Lordships that our union cannot prosper with this internal market after January 2021.

There is a valid question on how governance and disputes relating to the internal market should be dealt with through intergovernmental machinery; my noble friend the Duke of Montrose alluded to our earlier discussions on this. As I updated your Lordships earlier in these discussions, the Government are looking with the devolved Administrations at reforms to the Joint Ministerial Committee structure. The intent is to move on through the joint intergovernmental relations review.

This review will deliver the overarching architecture to support the delivery of improved and effective engagement with the devolved Administrations at all levels of government—as my noble friend the Duke of Montrose alluded to—from officials upwards and, if necessary, the consideration of cross-cutting issues above departmental level. I repeat what I said earlier: this is not complete, but work is progressing positively in this respect. I think that all the various Administrations would accept that. We welcome further discussions with the DAs on finalising the format of these engagement structures, including to complement those relating to the internal market, and I look forward to reporting back to this House on our finalised governance structures when we have concluded the review, which, as I have said, we aim to do by the end of the year.

In addition, as set out in my letter to colleagues prior to Report, the Government propose that a meeting be held in the new year with devolved counterparts once the Bill becomes law to agree a programme of official and ministerial-level engagement on the—my brief says “operationalisation”; can you imagine such a thing?—implementation and operation of the Bill. This includes determining the practical arrangements to deliver our commitment to meet Ministers in the devolved Administrations annually, as undertaken on this Bill, to review the operation of the UK internal market as supported by Parts 1 to 4 of the Bill, including new developments that might require the use of such delegated powers. This annual meeting will be just one of the regular intergovernmental meetings between BEIS Ministers and officials on other portfolio matters, such as the Covid-19 response.

On Amendment 76, I do not mean to disparage the noble Lords, Lord Fox and Lord Purvis of Tweed; indeed, I thank them for their openness and engagement in the process so far. I was going on to thank the Labour Party for its engagement, and I never want to give unintended offence to anyone in your Lordships’ House.

I thank the noble Lord, Lord Stevenson, for what he said; I am grateful for the engagement and discussions that we have had on this and the common frameworks programme. His amendment seeks to create a link between the common frameworks programme and the market access principles. While it is true that the internal market provisions and common frameworks programme are complementary, as we have tried to persuade your Lordships—that is how the Government see it—it is not appropriate to create a link with the common frameworks programme in that specific way in this amendment. I will not go on at length because the noble Lord has said that he does not intend to press it, but I underline that I appreciate the strength of feeling in the House on common frameworks, which I and other Ministers continue to reflect on. In saying that, I will not undertake to come back to this House on Third Reading, so if any noble Lords wish to test the opinion of the House on this issue, it would have to be at this point.

I assure noble Lords that the Government remain committed to the common frameworks programme. The processes established in it will work with future intergovernmental relations machinery. As the noble Lord, Lord Stevenson of Balmacara, pointed out, with the inclusion of the amendment of the noble and learned Lord, Lord Hope—although the Government did not and do not accept it—your Lordships have ensured that common frameworks will be discussed in another place; no doubt we will have opportunities to consider it further. I think that was the spirit in which the noble Lord, Lord Stevenson, was withdrawing his amendment. I appreciate that and offer him those words of assurance.

The process proposed in his amendment and Amendment 75 undermines the purpose of the market access principles, which are designed to provide underpinning certainty that the UK internal market will continue to function in all circumstances. These amendments would create uncertainty about whether and when the market access principles would apply. Leaving businesses to manage this uncertainty and friction is not acceptable. Indeed, it undermines the core purpose of the Bill of providing businesses with certainty that they can continue to trade across the UK at the end of the transition period. For these reasons, the Government cannot support these amendments and I hope the noble and learned Lord will withdraw his amendment.

Lord McNicol of West Kilbride Portrait The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
- Hansard - - - Excerpts

I have received no requests to speak after the Minister. I now call the noble and learned Lord, Lord Mackay of Clashfern.

--- Later in debate ---
19:31

Division 5

Ayes: 134


Liberal Democrat: 79
Crossbench: 35
Labour: 8
Independent: 6
Green Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 247


Conservative: 201
Crossbench: 25
Independent: 13
Democratic Unionist Party: 5
Ulster Unionist Party: 2

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Wednesday 2nd December 2020

(3 years, 3 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 155-I Marshalled list for Third Reading - (27 Nov 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Baroness Evans of Bowes Park Portrait The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
- Hansard - - - Excerpts

My Lords, before the House begins its Third Reading on the United Kingdom Internal Market Bill, it may be helpful to say a few words about Third Reading amendments. In line with the procedure agreed by the House, the Public Bill Office advises the usual channels that Amendment 2 in the name of the noble Baroness, Lady Ritchie of Downpatrick, on the Marshalled List for Third Reading today, falls outside the guidance in the Companion on Third Reading amendments. On the advice of the Public Bill Office, the usual channels met and have recommended to the House that Amendment 2 should not be moved. The noble Baroness, Lady Ritchie, was informed of the view of the usual channels. She has confirmed to my office that she will not move her amendment today.

I am grateful to the noble Baroness and the other signatories of the Report stage amendment and for the positive engagement with the noble Baroness that took place yesterday with my noble friend Lord Callanan and Ministers in the Northern Ireland Office, of which the House will hear more later.

Baroness Henig Portrait The Deputy Speaker (Baroness Henig) (Lab)
- Hansard - - - Excerpts

I call the Minister to make a Statement on legislative consent.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

My Lords, I am required to inform the House that on 7 October the Scottish Parliament voted not to grant legislative consent because of its assertion that the Bill negatively impacts the devolution settlements. We have remained open to engagement with the Scottish Government on the contents of the Bill, and this offer still very much stands. The Senedd and Northern Ireland Assembly have not yet voted on legislative consent, but we have continued to engage with both Administrations on the Bill’s contents in recent weeks. This engagement has been fruitful, and the Government have listened closely to concerns. It has resulted, for example, in the Government tabling an amendment to ensure that the devolved Administrations have a strong role in appointments to the Office for the Internal Market panel, in light of Welsh Government proposals.

We appreciate the significance of the UK Government legislating without consent for this Bill. Our ambition, of course, remains to secure legislative consent Motions for the Bill. As I have said throughout the passage of the Bill, the UK Government remain open to discussions with all the devolved Administrations.

Clause 12: Modifications in connection with the Northern Ireland Protocol

Amendment 1

Moved by
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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, my original Amendment 21 on Report, also signed by the noble Lords, Lord Anderson and Lord Wigley, and the noble Baroness, Lady Bowles, on which I spoke on 18 November 2020 and moved formally on 23 November 2020, replaced the original Clause 10 with a new clause listing public interest derogations from market access principles. I was pleasantly surprised and grateful that the Government accepted the amendment without a Division. The clerks subsequently advised us that the amendment required some consequential changes to the Bill to remove minor inconsistencies. These changes are set out in the amendments before your Lordships’ House today. Amendment 1 removes two subsections on page 8 and Amendment 3 removes Schedule 1 entirely. I beg to move.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

The Government regret the changes made to the previous Clause 10 on Report, but I will not reopen that debate here. I appreciate the need for these amendments to tidy up the Bill text so the Government will not oppose them.

Amendment 1 agreed.
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Moved by
Lord Callanan Portrait Lord Callanan
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That the Bill do now pass.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank noble Lords from across the House for the quality of the debates and the scrutiny provided throughout the passage of this Bill. I am grateful for the constructive engagement from many noble Lords from all parts of the Chamber that we have had both in and out of the Chamber, and hope that we can continue these discussions in the same spirit. I extend my thanks to other members of the ministerial team: my noble friends Lord True, Lady Bloomfield of Hinton Waldrist, Lady Scott of Bybrook and Lady Penn, as well as Shreena and the rest of the excellent civil servants on the Bill team.

I have said throughout the debates that this Bill is essential for guaranteeing the economic and political integrity of the United Kingdom. It will ensure much-needed certainty for businesses as we leave the transition period. It will preserve our ability to trade freely across all parts of the United Kingdom. Having listened to all the debates in this House on this Bill, I believe I can say that all noble Lords share this objective. While noble Lords and I may not have always agreed on every single point—to put it mildly—the challenges posed by noble Lords and debates we have had have always been conducted in a constructive and courteous manner—except, obviously, the noble Lord, Lord Foulkes, but we accept his contributions.

On a related note, I want to touch briefly on an amendment in the name of the noble Baroness, Lady Ritchie of Downpatrick, referred to by the Leader of the House. As I committed to do on Report, I facilitated and joined a meeting on this issue between my honourable friend Robin Walker, Minister of State in the Northern Ireland Office, the noble Baronesses, Lady Ritchie, and Lady Suttie, to discuss this in more detail. I thank the noble Baronesses for a good meeting, which assuaged their concerns on this issue.

For the benefit of the House, let me be clear: Article 2 of the Northern Ireland Protocol is vital, and the Government are fully committed to upholding it. I assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward, and will not be impacted by the workings of this Bill. I have explained this in greater detail in a letter to the noble Baroness, Lady Ritchie. To reassure noble Lords who may have similar concerns, I will place a copy in the Library. I beg to move.

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Lord Callanan Portrait Lord Callanan (Con)
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My Lords, let me first thank all those who have contributed to the debate for their remarks. Again, all noble Lords have approached the subject in a timely and constructive manner, in the finest traditions of this House, as has been demonstrated throughout the passage of the Bill. It is now up to the other place to scrutinise the changes that this House has made to the Bill. It would be wrong of me to prejudge what will happen there, but I can say that should the Bill return for further consideration in this House, I look forward to working with all noble Lords in the spirit of constructive—well, sometimes constructive —co-operation that we have all shown so far.

Bill passed and returned to the Commons with amendments.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Consideration of Lords amendments & Ping Pong & Ping Pong: House of Commons
Monday 7th December 2020

(3 years, 3 months ago)

Commons Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Commons Consideration of Lords Amendments as at 7 December 2020 - (7 Dec 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Rosie Winterton Portrait Madam Deputy Speaker
- Hansard - - - Excerpts

With this it will be convenient to discuss the following:

Lords amendments 2 to 7.

Lords amendments 8 to 19, and Government motions to disagree.

Lords amendment 20 to 29.

Lords amendments 30 to 34, and Government motions to disagree.

Lords amendments 35 to 41.

Lords amendment 42, and Government motion to disagree.

Lords amendment 43, Government motion to disagree, and Government amendments (a) and (b) to the words so restored to the Bill.

Lords amendments 44 to 57, and Government motions to disagree.

Lords amendments 58 to 60.

Lords amendment 61, and Government motion to disagree.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

This Bill has generated a lot of debate in both Houses, and rightly so. It is a Bill that is vital in providing certainty for businesses and for protecting the Union. It is a Bill that allows the continuing smooth functioning of our UK internal market at the end of the transition period. Our approach will give businesses regulatory clarity and certainty and ensure that the cost of doing business in the UK stays as low as possible, and it will do so without damaging and costly regulatory barriers emerging between the nations of the United Kingdom.

In the other place, the Government and peers had good discussions and debates on the principle behind the Bill, and they have come to very reasonable proposals in some areas. It is right that both Houses work constructively to scrutinise and improve legislation, and the Government are therefore accepting a number of Lords amendments. That is why the Government are disappointed that in some cases amendments put forward by the other place would do the opposite and generate more ambiguity and uncertainty. Other amendments put forward go further, in hampering the Government’s ability to protect the Union and our internal market, to level up the country and to take advantage of the opportunities afforded by the end of the transition period. That is why today the Government are disagreeing with a series of amendments, to which I will now turn.

Regarding Lords amendments 1, 19 and 34, the other place and Her Majesty’s Opposition in this House have been clear about their strong support for common frameworks. I am pleased to hear that, because the UK Government are strongly committed to them as well. Joint work with the devolved Administrations to develop common frameworks is progressing well, and the first three frameworks are currently undergoing parliamentary scrutiny. The common frameworks programme represents successful joint working, ensuring that our shared objectives of making coherent policy, upholding high standards and supporting the distinct needs of each part of the UK can advance as one. They are evidence of our mutual respect for devolution.

I am pleased that work is well under way on the 33 frameworks that we expect to conclude jointly with the devolved Administrations. Thirty of those will be provisionally agreed by the end of 2020 and will then be scrutinised by Parliament and the devolved legislatures. A small number are likely to clear scrutiny by the end of the transition period, at which point they will become full frameworks.

Alan Brown Portrait Alan Brown (Kilmarnock and Loudoun) (SNP)
- Hansard - - - Excerpts

It is good that the Minister recognises the importance of common frameworks. All four nations of the United Kingdom have agreed a common framework on an emissions trading system, so why is the Treasury now considering imposing a carbon emissions tax instead, against the wishes of the devolved Administrations? Surely that does not respect common frameworks.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Discussions on that are ongoing and it is right that we have them. On the common frameworks, the devolved Administrations and representatives of England in the UK Parliament have made their views well known.

Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
- Hansard - - - Excerpts

We have a strong agrifood sector in Northern Ireland. There needs to be an understanding between the Northern Ireland Assembly and this place, to ensure that our agrifood sector can continue to expand and sell its products around the world. Will the Minister reassure us that that will happen and that nothing will hinder it?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

The whole purpose of this is that we can get the internal market right. We do not want to hamper any business, wherever it is in the UK, from being able to trade overseas with the opportunities afforded by global Britain at the end of the transition phase and beyond.

I want to make progress because I want to get across some detail and allow other Members to have their say. The common framework programme was never designed to be an all-encompassing solution to the maintenance of the internal market. This Bill will instead provide the additional legislative protection to internal UK trade, which is required for business certainty. As an aside, I note that half of the active frameworks have little or no interactions with this Bill, as they do not pertain to the internal market. That has sometimes been forgotten in recent debates.

The flexibility that underpins the framework programme is key to its success. It was set up in 2017 with an objective to manage regulatory coherence in specific devolved policy areas of returning EU law. While the frameworks are envisaged in very high-level terms in schedule 3 to the European Union (Withdrawal) Act 2018, they are taken forward by voluntary agreement, which is the reason why neither the UK Government nor the devolved Administrations have so far felt the need to codify the common frameworks process in legislation. I thank the noble and learned Lord Hope for his considered contributions to the debate and for his thoughtful amendments to the Bill. However, while the Government have carefully considered the arguments made in both Houses about putting common frameworks on the face of the Bill, we feel that that may not sit well with the flexible and voluntary nature of the common frameworks programme.

In addition to their voluntary nature, we must also bear in mind that the current frameworks are jointly owned by the devolved Administrations. Any proposal to legislate them into this Bill would need to take into account their involvement in the programme overall. I am therefore concerned that the Lords amendments would automatically disapply mutual recognition and non-discrimination principles. This would create a very broad exclusions regime and uncertainty for businesses and consumers over the terms of trade within which they are operating. That is clearly not in keeping with the aim of this Bill, which is to provide maximum certainty and a stable trading environment.

Joanna Cherry Portrait Joanna Cherry (Edinburgh South West) (SNP)
- Hansard - - - Excerpts

I will just take the Minister back to his statement that the common frameworks were never supposed to be all-encompassing in relation to the internal market, because I am looking at the Joint Ministerial Committee communiqué from 16 October 2017, which says in its first principle that the common frameworks were to be

“established where they are necessary in order to…enable the functioning of the UK internal market”

The Government have gone back on that, have they not?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

The hon. and learned Lady will note that the document states “where…necessary”. As I said earlier, many of the common frameworks do not relate to the internal market. That was my point exactly.

It is a core point that none of us should wish to see internal barriers to trade erected inside our country to the detriment of jobs and growth. We have been clear in the other place about how we see the common frameworks programme and the market access principles interreacting with this point at the heart of the argument. While common frameworks are jointly owned, the UK’s full internal market regime can only be owned by the UK Government and overseen by the UK Parliament.

The Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith) looks forward to completing the delivery of the common frameworks programme, discussing further with our partners in the devolved Administrations and the devolved legislatures how we can capitalise on working ahead through common frameworks and put these areas of co-operation on a sustainable footing for the longer term to the benefit of citizens and businesses. We welcome the support of right hon. and hon. Members in achieving that, but we have been clear that amendments 1, 19 and 34 are not necessary and have considerable drawbacks. I therefore call on the House to disagree with them.

To speak to Lords amendments 8 to 13, 15, 16 to 18, 30 to 33 and 56, the Government have taken positive steps to reach a compromise position that balances concern about delegated powers with the ability of the Government to act to protect our internal market. The Government have already made significant steps. We have removed the power, which is no longer considered essential, for the operation of flexibility in the internal market system. We have made further changes on transparency and accountability, such as a review mechanism on the use of such powers. In the other place, we tabled amendments to require consultation with the devolved Administrations before the use of key powers, reflecting our previous commitments. However, once consultation is undertaken, the right place for final decisions should be back in Parliament where parliamentarians from all parts of the UK can debate and vote on the proposed use of the powers. The Government are therefore disappointed by the decision in the other place.

Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
- Hansard - - - Excerpts

My understanding is that the Welsh Senedd will vote tomorrow to decline to approve the legislative consent motion for the Bill. Does that not indicate the problem with the British Government’s approach to consent? Consent means nothing without the power of veto.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

If the Welsh Assembly decides that way, that will be regrettable—[Interruption.] The Welsh Senedd. It will be regrettable, because it is important that we continue to work together and allow continuity of trade and business between Wales, Welsh businesses and, indeed, the other nations of the UK. That is what Welsh businesses have been asking us for as we have been talking to them. They want certainty, and this Bill will give them certainty.

The Government are disappointed that the other place did not take up our reasonable offer and removed key provisions needed to ensure the operation of the internal market.

Sammy Wilson Portrait Sammy Wilson (East Antrim) (DUP)
- Hansard - - - Excerpts

Does the Minister not accept that for places such as Northern Ireland, Wales and Scotland, common standards that allow free trade between those parts of the United Kingdom and their main market, which is probably in England, are an advantage to everyone? The provisions in the Bill should not scare or frighten anybody.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

The right hon. Gentleman puts it correctly. When I have spoken to businesses in Scotland, Wales and Northern Ireland, they have agreed with businesses in England. The main market for so many of these businesses is within the United Kingdom. We talk about global Britain, but we have to make sure that we have our internal market right. The opportunities for business, including those in Northern Ireland, are absolutely at the heart of this Bill, and I appreciate his intervention.

Removing the powers that I have outlined would make it difficult for the Government to respond to businesses and the wider stakeholder feedback and act rapidly to respond to changes in the UK internal market due to the shifting economic landscape. The other place also added in conflicting, inconsistent amendments accepting our consultation offer, but also adding consent mechanisms.

Moreover, the other place’s three amendments 12, 13 and 56 introduce a new system for excluding requirements from market access principles, based on a long list of legitimate aims. This new clause would render the protections in part 1 almost meaningless. The regulator or legislator could justify a very wide variety of discriminatory measures using the justifications in the new clause. It would result in uncertainty as to what is in scope and leave little protection from regulatory barriers for businesses operating across the whole of the UK. However, the door remains open to the other place to reconsider, and we have kept our offer on the table.

I will turn now to Lords amendments 48 and 49. Clauses 48 and 49 support the Government’s determination to deliver the commitments on which we were elected—levelling up and delivering prosperity for the whole United Kingdom and strengthening the ties that bind our Union together. They provide for a unified power that operates consistently UK-wide.

Alan Brown Portrait Alan Brown
- Hansard - - - Excerpts

Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will just make progress for a minute.

The power will allow for strategic investment throughout the UK, underpinning the United Kingdom Government’s determination to see all parts of the UK flourish. It will make sure that we can deliver UK-wide replacements for EU funds, including meeting our manifesto commitment to replace EU structural funds, and allowing the UK Government to invest directly to support communities and businesses across all four parts of the UK.

Liz Saville Roberts Portrait Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
- Hansard - - - Excerpts

Can the Minister explain how this can be strategic investment if the Senedd and the Scottish Parliament have no say in arranging it?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

As we said in the last debate in this place, this is complementary to existing spending powers in Wales and Scotland. We will always look to work for the good of the people there, which will reflect—undoubtedly, I am sure, on so many occasions, if not all occasions—the mood and direction from their elected politicians in the Senedd.

We need to make sure that we can deliver the UK-wide replacements for EU funds, including meeting our manifesto commitment to replace EU structural funds and deliver the UK shared prosperity fund, which will allow the UK Government to invest directly to support communities and businesses across all four parts of the UK. Previously in many of these areas, the EU mandated how our money had to be spent, with little say from elected representatives in the United Kingdom. The UK Government intend to take a much more collaborative approach in delivering any funding that replaces EU programmes.

The UK Government remain committed to working collaboratively with key partners, including devolved Administrations, in the provision of financial assistance under this power. Let me be clear that this power is in addition to the devolved Administrations’ existing powers. It will allow the United Kingdom Government to complement and strengthen the support given to citizens, businesses and communities in Scotland, Northern Ireland and Wales. It does not take away responsibilities from the devolved Administrations.

Chris Elmore Portrait Chris Elmore (Ogmore) (Lab)
- Hansard - - - Excerpts

The frustration at this utter confusion is that this actually circumvents the devolution settlement. Devolution has been in place for some 20 years, and it is Ministers in Wales who have been working with the European Union on how European funding is allocated within projects in Wales. This new system removes the decision making from Welsh Ministers and circumvents the devolution that has existed for more than 20 years. Can the Minister not understand the frustration on the Opposition Benches and the bewilderment of Welsh, Scottish and Northern Ireland Ministers about why they are just not being consulted on priority projects in Wales and any of the other nations of the UK?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I can understand the frustration if that is the wilful misinterpretation of what is actually happening. The EU mandates so much of this spending before it gets to the Welsh Senedd, the Scottish Parliament and the Northern Ireland Assembly and, indeed, here in England, from where we are speaking, but we will work collaboratively to ensure that so many of those concerns are met.

We are disappointed as a Government that the other place has decided to take out the power and hamper the Government’s ability to level up the country and drive investments into all parts of the UK. These Lords amendments also alter the financial arrangements made in this House, and I therefore call on this House to disagree with them.

Turning to Lords amendment 51, I emphasise the importance of the UK continuing to take a clear and consistent approach to subsidy control as we move away from EU state aid rules. The Government have always been clear in our view that the regulation of state aid and the EU’s approach to subsidy control is a reserved matter. This reservation does not change the devolved Administrations’ position in practice. The devolved Administrations have never previously been able to set their own subsidy control rules, as this was covered by the EU state aid framework, but they will continue to make their own spending decisions on subsidies, as they do currently. The effect of the amendment would be to create unacceptable uncertainty regarding the extent to which subsidy control is a reserved or devolved competence. This would potentially give rise to inconsistency if there were different regimes to regulate subsidies across the UK. Ultimately, that could undermine fair and open competition across our internal market, inevitably discouraging investment in the UK, bringing additional costs to supply chains and consumers.

This reservation will enable the UK to design a bespoke subsidy control regime that meets the needs of the UK economy. The Government have been clear that any future domestic regime will operate in a way that works best for all UK businesses, workers and consumers. In the coming months, we intend to publish a consultation on whether we should go further than our World Trade Organisation and international commitments, including whether further legislation is necessary. The House should therefore disagree with this amendment.

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Robert Neill Portrait Sir Robert Neill (Bromley and Chislehurst) (Con)
- Hansard - - - Excerpts

The Minister will appreciate, having had some hand in the amendments, that I have an interest in this matter. He will have seen that a statement has been put out by the Government—following the meeting of the Joint Committee earlier today—in which they undertake that they would, in effect, remove clause 44 and deactivate clauses 45 and 47, which were the subject of some concern in this place. Will he confirm that that is the case? Will he also confirm that were there to be any like clauses included in the taxation (post-transition period) Bill, which may come before us, they should, at the very least, be subject to the same parliamentary lock as was inserted in this Bill, if they were to be required at all?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank my hon. Friend for his contributions not just here and now, but in the earlier stages of this Bill, which allowed for that important lock. The taxation Bill and this Bill work in lockstep as well, and I can confirm his interpretation. I will come on to that in a second regarding the statement earlier today.

After the transition period ends, Northern Ireland will and must remain fully integrated with the UK’s internal market. There should be nothing controversial about that. The protocol expressly recognises that Northern Ireland will remain part of the UK’s customs territory and qualifying Northern Ireland goods will enjoy unfettered access to the rest of the UK market. We will never accept additional burdens or barriers on goods moving from Birmingham to London, and neither should we accept those on goods moving from Belfast to Liverpool. Moreover, clause 46 would codify in legislation the existing practice where state aid is notified to the European Commission by the Foreign Secretary via the UK mission in Brussels.

Ian Paisley Portrait Ian Paisley (North Antrim) (DUP)
- Hansard - - - Excerpts

I thank the Minister for the commitment he has made about goods travelling from GB to Northern Ireland. Can he tell us whether the same assurance will be in place for all goods moving from Northern Ireland to GB?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I can indeed.

Part 5 of the Bill contains vital provisions to ensure that this will always be the case, whatever the outcome of our negotiations within the EU. Since these clauses were originally introduced, the UK and EU have worked constructively together through the withdrawal agreement Joint Committee discussions, which continue to progress, and final decisions are expected in the coming days. I can confirm today that if the solutions being considered in those discussions are agreed, the UK Government will be prepared to remove clause 44, concerning export declarations, from the Bill. The UK Government would also be prepared to deactivate clauses 45 and 47, concerning state aid, such that they could be used only when consistent with the United Kingdom’s rights and obligations under international law.

Stephen Farry Portrait Stephen Farry (North Down) (Alliance)
- Hansard - - - Excerpts

I wonder whether the Minister could reflect on two points. First, I am relatively new to this place, but my understanding is that there has not been a bigger vote in the other place against a proposal from this House for many decades, if not centuries. Secondly, does he recognise that the majority of people and businesses in Northern Ireland want to see the solutions he set out work through the Joint Committee and not through any breach of international law? It is important that there should be a solid legal framework to enable businesses in Northern Ireland to conduct their affairs.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Indeed, we all want this to be dealt with through the Joint Committee. That is why the discussions are continuing, and that is why, in these crucial hours of negotiations between the UK and the EU, we wish them well in that regard.

Robert Neill Portrait Sir Robert Neill
- Hansard - - - Excerpts

I will not trespass on the Minister’s time again, but will he confirm that the deactivation of clause 47 would remove one of the areas—the “notwithstanding” clauses—that caused most concern, particularly to legal commentators? Does he agree that that is a significant gesture of good faith on the part of Her Majesty’s Government’s and that it will hopefully remove some of the real concerns that have, for legitimate reasons, been expressed in other places? Does he agree that this demonstrates that we want to find a constructive way forward?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

My hon. Friend is right again. I know the debate that has surrounded the “notwithstanding” clauses, and it is important that we work in collaboration and partnership as we do these difficult negotiations, but, ultimately, that is where we want to solve these problems, rather than having to legislate for them in the first place. As I say, we will deactivate them when we get to the point that that is consistent with the United Kingdom’s rights and obligations under international law. While we are hopeful of success, it is only prudent that until such time as the discussions have successfully concluded, we retain these clauses in their current form as a fall-back option.

As has been said many times, the Government are fully committed to implementing the withdrawal agreement and the Northern Ireland protocol, and we have already taken many practical steps to do this, but these clauses will ensure that, irrespective of the outcome of our negotiations with the EU on implementation of the protocol, we will always protect Northern Ireland’s place in the United Kingdom. They will ensure that businesses based in Northern Ireland have unfettered access to the rest of the United Kingdom and that there is no legal confusion or ambiguity in UK law about the interpretation of the state aid elements of the Northern Ireland protocol.

Sammy Wilson Portrait Sammy Wilson
- Hansard - - - Excerpts

I thank the Minister for giving way again. I just want to get some clarification. Article 16 of the Northern Ireland protocol makes it quite clear that where the protocol does serious economic, societal or environmental damage to Northern Ireland, the Government have the right to act unilaterally. If this clause is to be removed and set aside, how will the Government be able to take unilateral action if changes in the protocol or demands from the EU do the kind of damage that is outlined in article 16?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

As I have said before in regard to these clauses, the changes that we set out in a statement earlier today work on the assumption that we have had success in the discussions and that we can solve this elsewhere. We hope that the “notwithstanding” clauses will never have to be used, and we understand the concerns that have been raised. Making regulations of this nature would not be done lightly. That is why, before this clause is commenced, this House, as we have discussed, will be asked specifically to approve a motion to that effect, and the other place will hold a take note debate. Any regulations made under this clause would be subject to the affirmative or made affirmative procedure, meaning that they will be subject to debates requiring a vote in both Houses.

Moreover, as the Prime Minister has made clear, in addition to taking these steps in domestic law, if we had to make it clear that we believed the EU was engaged in a material breach of its duties of good faith as required and provided for under the withdrawal agreement and the Vienna convention on the law of treaties, we would seek an arbitration panel and consider safeguards under article 16 of the protocol in parallel. We must ensure that, in any scenario, we are upholding the economic integrity of the United Kingdom, maintaining the Belfast or Good Friday agreement and the gains of the peace process and protecting the delicate balance between communities in Northern Ireland.

These “notwithstanding” clauses are a limited and reasonable step that create a safety net to enable those aims to be met. They ensure that the UK Government can always act as necessary to protect and maintain our UK internal market and Northern Ireland’s integral place in it. That is entirely in keeping with what the Government have constantly said, including in public commitments from the Prime Minister, our manifesto commitments and our commitments to the people of Northern Ireland. That is why the Government cannot agree with the Lords amendments, which would remove what was part 5, and why I urge hon. Members to disagree with the Lords amendments and restore the critical provisions in full.

Ian Paisley Portrait Ian Paisley
- Hansard - - - Excerpts

I thank the Minister for allowing me to intervene in this way. Does he welcome the comments made by the Irish Foreign Minister, Mr Coveney, who said that, essentially, all the commentary for the past three years on erecting borders on the island of Ireland was basically a game of bluff by the Irish Republic? Does he welcome the fact that it has now conceded that point?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I have not heard those words, so I will not comment on them. There has been a lot of commentary, but what is important is the reality. Northern Irish businesses want the certainty offered by this Bill and the unfettered access to the GB market.

I emphasise that the Government has been reasonable, and will continue to be reasonable, in discussions on this Bill. We have made many positive changes to the Bill and they are on the table, but the Government need to balance this with the need to deliver a Bill that provides the certainty that businesses want and need to invest and create jobs, to maintain high standards and choice for consumers while keeping prices down, to ensure that the Government can continue to continue to level up the whole of the United Kingdom and strengthen our precious Union, and, ultimately, to preserve the UK internal market that has been an engine of growth and prosperity for centuries.

Rosie Winterton Portrait Madam Deputy Speaker (Dame Rosie Winterton)
- Hansard - - - Excerpts

Colleagues will see that there are a large number of right hon. and hon. Members who want to contribute to this debate. If we have any chance of getting them in, I will have to start with an immediate five-minute limit on Back-Bench speeches, but that may well have to go down.

--- Later in debate ---
Nigel Evans Portrait Mr Deputy Speaker (Mr Nigel Evans)
- Hansard - - - Excerpts

Order. My apologies to the seven Members who did not get in to speak. I call the Minister.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank everybody who spoke in the debate today and all the right hon. and hon. Members who have engaged with the Bill throughout.

From many speakers, especially at the beginning of the debate, we heard about exactly what businesses and people throughout the country have wanted—the certainty and consistency that the Bill will deliver. Unfortunately, we have heard, as we have throughout the Bill’s passage, a lot of inconsistency from Opposition Members. We have heard the SNP talk about the fact that we are not going to get a trade deal with America but, by the way, when we do, we have to accept chlorinated chicken. Neither of those things are true.

We have heard that people want the Government to change and negotiate and work with the European negotiating team, but when we reach out to them to explain what part 5 of the Bill is all about and the fact that we will not need a safety net should we get successful talks in the Joint Committee, it is described as shambolic. Which would people like? Would they like change? I think we want certainty.

People have talked about the need for devolution in Northern Ireland and the need to respect Northern Irish businesses and the parties in Northern Ireland and give their businesses certainty, but Opposition Members will vote against part 5 and, in doing so, vote against unfettered access for Northern Ireland into GB.

We heard an SNP Member describe the UK Government as a boa constrictor, yet they want independence from the UK Government and from the other nations to go back to the boa constrictor that is the EU.

We need the Bill and these clauses now because parliamentary time dictates as much and we want the legislation to be ready for the end of the transition phase, whatever happens in the remaining days of discussions with the EU. I wish both sides well in their discussions.

To conclude, the UK’s internal market has been the bedrock of our shared prosperity for centuries. It has enabled businesses and individuals to thrive and has been the source of unhindered and open trade throughout the country. It has helped to demonstrate that our country is greater as a Union than the sum of its parts.

The Government are committed to safeguarding the Union. We fully support devolution and continue to put the Union at the heart of everything we do. I very much believe that the four corners of the UK are stronger together and that the Bill supports and respects the devolution settlements. Some Members have said that the Bill is a threat to devolution, but in reality they are trying to further their narrow political arguments rather than look at the wider political arguments. Their narrow political arguments about independence have nothing to do with devolution.

I stress that the proposals in the Bill are designed to ensure that devolution can continue to work for everyone. All devolved policy areas will stay devolved and the proposals ensure only that there are no new barriers to UK internal trade. Indeed, at the end of the transition period hundreds of powers that are currently exercised by the EU will flow back to the UK. Many of these powers will fall within the competence of the devolved Administrations, and this flow therefore represents a substantial transfer of powers to the devolved Administrations that they did not exercise before the EU exit.

The Bill is vital in preserving our internal market and continuing to provide certainty for businesses as we seek to recover from covid-19, prepare for the opportunities after the transition period and protect jobs. It will ensure that UK businesses can trade across our four home nations in a way that helps them to invest and create jobs, just as they have for hundreds of years. I want to emphasise again that the Government have been, and will continue to be, reasonable in discussions on this Bill. We made many positive changes, and they are on the table, but ultimately the Government need to balance this with the need to deliver a Bill that provides the certainty that businesses want and the need to invest and create jobs. I therefore call on hon. Members to support the Government in these objectives, which I believe we all share, when they vote today.

Question put, That this House disagrees with Lords amendment 1.

--- Later in debate ---
20:55

Division 176

Ayes: 359


Conservative: 349
Democratic Unionist Party: 8
Independent: 1

Noes: 265


Labour: 195
Scottish National Party: 47
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Conservative: 1

Lords amendment 1 disagreed to.
--- Later in debate ---
21:06

Division 177

Ayes: 360


Conservative: 349
Democratic Unionist Party: 8
Independent: 1

Noes: 265


Labour: 196
Scottish National Party: 47
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1
Conservative: 1

Lords amendment 12 disagreed to.
--- Later in debate ---
21:23

Division 178

Ayes: 357


Conservative: 346
Democratic Unionist Party: 8
Independent: 1

Noes: 268


Labour: 196
Scottish National Party: 47
Liberal Democrat: 11
Independent: 4
Conservative: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Lords amendment 47 disagreed to.
--- Later in debate ---
21:34

Division 179

Ayes: 359


Conservative: 347
Democratic Unionist Party: 8
Independent: 1

Noes: 55


Scottish National Party: 45
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Conservative: 2
Green Party: 1

Lords amendment 48 disagreed to.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Wednesday 9th December 2020

(3 years, 3 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 156-I Marshalled list for consideration of Commons reasons and amendments - (8 Dec 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
Lord Callanan Portrait Lord True
- Hansard - - - Excerpts

That this House do not insist on its Amendments 1, 19 and 34 to which the Commons have disagreed for their Reason 1A.

1A: Because they will create legal uncertainty, which would be disruptive to business.
Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
- Hansard - - - Excerpts

My Lords, I think I was on mute for a minute there.

Lord True Portrait Lord True (Con)
- Hansard - - - Excerpts

The noble Lord, Lord Adonis, says, “Keep it up,” which I know is a sentiment widely shared.

Noble Lords have been clear throughout this debate on the UKIM Bill about their support for the common frameworks programme. I and the Government concur with those sentiments, and I reiterate the Government’s continued commitment to this programme. I am pleased to update your Lordships’ House that common frameworks are developing well, with three common frameworks currently undergoing scrutiny, including in this House’s committee chaired by the noble Baroness, Lady Andrews—and I pay tribute to the work of that committee.

Out of 33 active frameworks that we have assessed are needed, we expect 30 to be agreed by the end of 2020, mostly on a provisional basis, pending scrutiny by Parliament and the devolved legislatures. The common frameworks programme embodies the value of strong intergovernmental relations. The UK Government and the devolved Administrations are working together, on a voluntary basis, in support of cohesive policy-making and the maintenance of high standards in respect of the specific needs of each part of the United Kingdom. While recognising this positive collaboration, we also need to acknowledge that the common frameworks were always intended to cover only a specific set of issues where powers are returning from the EU. Common frameworks support the functioning of the internal market but cannot by themselves ensure regulatory coherence across the whole UK internal market—the key objective of this Bill.

As the Government have noted previously, we regret that the Scottish Government walked away from the joint internal market workstream in spring 2019. Detailed engagement has been ongoing with the Welsh Government and Northern Ireland Executive on this Bill, and the door remains open to the Scottish Government to join similar discussions. The strength of common frameworks lies in the fact that they provide a forum for discussion and collaboration, with a clear process in defined, but limited, areas of economic activity.

I thank the noble and learned Lord, Lord Hope, for his thoughtful participation in these debates and his considered amendments to the Bill, which he has now partly revised. I welcome also the willingness of the noble and learned Lord to continue engaging in discussions on his amendment with my officials, and those discussions may continue. I also thank noble Lords opposite for their own positive and practical engagement on these matters. Discussions are not exhausted on this topic.

On the amendment before us, I have cautioned your Lordships’ House before, regarding the previous amendments of the noble and learned Lord, Lord Hope, that this would lead to the automatic disapplication of the market access principles, creating a very broad exclusions regime, with the attendant risk of legal uncertainty for businesses and consumers over whether or not market access principles apply. It is the Government’s view that these revised amendments carry similar risks, both in terms of the breadth of the exclusions regime created and in terms of uncertainty. As to the latter, there is no safeguard against different Administrations attempting to implement different interpretations of an agreement into law, potentially leaving the courts in the unenviable position of adjudicating on these different interpretations. That would potentially invite the courts into the common frameworks process, which is inherently undesirable. Any such litigation would create great uncertainty for businesses. This is clearly not in keeping with the need to provide certainty and a stable trading environment for citizens across our United Kingdom.

Moreover, Amendments 1B and 1C prevent the introduction by a UK Government Minister of any new regulations in any area where discussions under the common frameworks process are ongoing. This could mean Ministers would be unable to act, even if there were an urgent need to do so.

Furthermore, the common frameworks programme was established in 2017 to manage the powers returning from the EU in devolved policy areas. In line with its voluntary nature, the programme has not been put into legislation, although I recognise that it is alluded to, in very high-level terms, in Schedule 3 to the European Union (Withdrawal) Act.

While it is a key objective of common frameworks to agree consistent regulatory standards, in practice there may be cases where divergent approaches could be agreed through a common framework. If this were to occur, and if any such divergence were to fall within the scope of the market access principles, we should be in no doubt that the market access principles set out in the United Kingdom Internal Market Bill would apply. That means that even if divergence is agreed in a particular case, it would not prevent businesses from other parts of the United Kingdom being able to sell their products into the relevant place. This would ensure that barriers to trade are not erected through the introduction of divergent policy.

We must also bear in mind that common frameworks are jointly owned by the devolved Administrations. Any proposal to legislate them into this Bill would need to take into account their involvement in the programme. While we have carefully reflected on the arguments made in both Houses, I respectfully suggest that the approach put forward in these amendments brings significant drawbacks to the Government’s ability to provide businesses with the certainty they need to operate across the United Kingdom.

I and colleagues across government look forward to discussing further with our partners in the devolved Administrations and devolved legislatures to consider how we can capitalise on the ways of working agreed through common frameworks. We are also working towards concluding a joint review of intergovernmental relations with the devolved Administrations. These future intergovernmental structures will create a system that secures strategic co-operation and proactive discussions on shared areas of interest, including on common frameworks. The aim of any reform will be to establish an adaptable and effective system of governance that facilitates building long-term trust between the Governments.

We are, of course, open to considering how to put these areas of co-operation on a sustainable footing for the longer term, complementing the IGR review and the market access principles to the benefit of citizens and businesses. I beg to move.

Motion A1 (as an amendment to Motion A)

Moved by
--- Later in debate ---
Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
- Hansard - - - Excerpts

My Lords, the noble Lord, Lord Callanan, who is not in his place, will recall how the notion of common frameworks evolved. When we were doing the first EU withdrawal Bill, it became clear that some of the powers returning from Brussels clearly fell within devolved competences. It was therefore widely understood that, to facilitate trade throughout the UK—as otherwise the rules affecting trade could vary across internal borders—a coming together of the four authorities would be needed to balance the desire for, and attraction of, diversity on some issues with a UK-wide approach to help consumers buy and manufacturers trade throughout the UK.

From the start, it was agreed that such frameworks would be established where needed—this is from the communiqué of October 2017—to

“enable the functioning of the UK internal market, while acknowledging policy divergence”

and that they would

“respect the devolution settlements … based on established conventions … including that the competence of the devolved institutions will not normally be adjusted without their consent”.

That was how they started. At that point, a list of 24 such topics was identified and, with a lot of good faith and hard work—as the Minister has acknowledged—the initial three Governments, along with Northern Ireland officials, set to work developing frameworks to enable that UK-wide market to flourish while recognising where devolved authorities might want variations for whatever reason. The basis was, to quote again from that document signed by the Government, to

“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory”.

Until this Bill arrived, everyone thought the system was working well and would accomplish the aims set for it. This should have been something for the Government to celebrate, as they have today, and build on. In fact, it has never been necessary for the Government to use their powers to freeze any devolved authority’s power—a provision set into the EU withdrawal Act, as the Minister has acknowledged.

While this Bill was anticipated, the expectation was that it would help build a new, in some ways unique, internal market across our four nations, which have different cultural, linguistic, agricultural, geographical and industrial histories and realities. Above all, our nations have different democratic governance structures from when we ceded rule-making to the EU in 1973. We thought the Bill would respect the devolution realities while helping to ensure the UK market could prosper for the sake of business, consumers, workers, our agriculture and the environment. As we now know, in addition to throwing the quite unnecessary Part 5 grenade into the Bill, the Government pulled the pin on another grenade by writing into the Bill market access rules which trumped, rather than solidified, the common frameworks programme, which is an approach built on consensus rather than top-down diktat.

The noble and learned Lord, Lord Hope, is not a revolutionary. He is not trying to rewrite the Bill. He is seeking—rather like the Minister himself through the Government’s welcome amendments on regulation-making, for which we will give thanks when we come to them later—to start the process on the basis of consent across the four devolved authorities, and, where that is not possible, leaving it to the UK Parliament, rightly, to legislate. We support a union, and therefore we support Parliament’s right at that point to have its proper role. But we start with consent, and then move to Parliament. What we do not support is starting here in Parliament and government, rather than with the four-party common frameworks. So, we welcome the noble and learned Lord’s upending of the procedure, starting with common frameworks and, where or if those do not work, using the market access approach of the Bill in areas obviously otherwise within devolved competencies.

I think we would all warn the Government to be very careful about clawing back decisions from our now quite long-established devolved settlements. I find today’s vote in the Senedd, by 36 to 15, to deny legislative consent to this Bill extraordinarily regrettable. It is an important Bill; it is not a small one. That was denied because of the message sent to Wales and the other devolveds by the rejection in the Commons last night of this approach. So we need a backstop for any failure to agree, but we fail to understand that what should be a backstop has become the starting gun.

The amendments in the name of the noble and learned Lord, Lord Hope, build on the devolution settlements and would support and strengthen the union, as well as creating what we all want: a successful, growing internal market, which is in the interest of all our citizens. We are right, as my noble friend Lord Adonis said, to ask the Government very genuinely to think again about the mechanisms—because that is what we are discussing—to achieve what I think we all want.

The noble and learned Lord, Lord Hope, said that if there was a will on the Government’s part to make the common frameworks system work, a solution could be found. Along with the noble Lord, Lord Fox, we concur with that view, and we welcome the Minister’s saying that “discussions are not exhausted”—I think I have his words right. Whether we do that by recognising the framework system in some way, extending the freeze provisions when they expire or pausing market access for a period of time while the four Governments talk—as mentioned by my noble friend Lord Adonis—there is surely a way forward. But I believe we need this amendment to get the Government to continue to discuss, so that we can get that way forward. That is why we will support the noble and learned Lord, Lord Hope, when he calls for a vote shortly.

Lord True Portrait Lord True (Con)
- Hansard - - - Excerpts

My Lords, I am grateful to all those who have contributed to this short debate and for the general tone of the interventions made. I was of course intrigued by the noble Lord, Lord Adonis, who emerged as a tribune of the people in this august senatorial assembly with his powerful oratory—a latter-day Gaius Gracchus, who said that your Lordships should reject everything sent to us by another place as a constructive contribution to law-making. I would respectfully give to the noble Lord, and indeed to any others who may share his views, the advice I would give to an overweight gentleman like myself: rejecting some of what is set before you, whether it is legislation or food, may well be desirable from time to time, but to reject everything is not conducive to the health of the legislature or of an individual. I hope that rather “Radical Jack” approach will not carry too much weight on the Opposition Benches.

I preferred the broader tone of the debate, which, as I heard it, actually reflected this Government’s resolve and the resolve of the parties represented in this place, at least—I cannot speak for down the Corridor: that all of us are committed to the security and future of this great union, to the common frameworks process and, as part of that, to hopefully developing further the next stage of inter-governmental relations, as I have explained to the House during the course of this Bill.

This Bill, however, works in tandem with the common frameworks programme by providing a broad safety net and additional protections to maintain the status quo of seamless intra-UK trade across all sectors of the economy, and there ought to be agreement on that in your Lordships’ House. It will ensure maximum certainty for businesses and investors, both domestic and overseas. I agree with what my noble friend Lord Naseby said from his perspective and experience in business. I am sure all noble Lords at heart support that objective and understand the need for a coherent internal market.

--- Later in debate ---
14:18

Division 1

Ayes: 320


Labour: 134
Crossbench: 80
Liberal Democrat: 78
Independent: 16
Conservative: 3
Green Party: 2
Bishops: 2
Ulster Unionist Party: 1
Plaid Cymru: 1

Noes: 215


Conservative: 196
Independent: 7
Democratic Unionist Party: 5
Crossbench: 5
Ulster Unionist Party: 1

--- Later in debate ---
Moved by
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

That this House do not insist on its Amendments 8, 9, 10, 11, 12, 13, 15, 16, 17, 18, 30, 31, 32, 33 and 56 to which the Commons have disagreed for their Reasons 8A, 10A and 15A, but do propose the following amendments in lieu—

Commons Reasons

8A: Because the omission of Schedule 1 by Lords Amendment No. 56 in consequence of replacing clause 10 with the new clause proposed by Lords Amendment No. 12 and the omission of powers to amend provisions of Parts 1 and 2 (including Schedules 1 and 2) by Lords Amendments Nos. 8, 9, 12, 17 and 30, would result in the Secretary of State being unable to respond quickly to the changing needs of the UK internal market.
--- Later in debate ---
8K: After Clause 20, Insert the following new Clause—
Duty to review the use of Part 2 amendment powers
(1) In this section “the Part 2 amendment powers” are the powers conferred by sections 17(2) and 20(7) (powers to amend certain provisions of Part 2).
(2) The Secretary of State must, during the permitted period—
(a) carry out a review of any use that has been made of the Part 2 amendment powers,
(b) prepare a report of the review, and
(c) lay a copy of the report before Parliament.
(3) In carrying out the review the Secretary of State must—
(a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland,
(b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4, and
(c) assess the impact and effectiveness of any changes made under the Part 2 amendment powers.
(4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.
(5) If either of the Part 2 amendment powers has not been used by the time the review is carried out, this section has effect—
(a) as if the report required by subsection (2), so far as relating to that power, is a report containing—
(i) a statement to the effect that the power has not been used since it came into force, and
(ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and
(b) as if the requirements of subsection (3) did not apply in relation to that power.”
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

My Lords, this group covers the exclusions to the market access principles and delegated powers-.

I turn first to Amendment 8L and other consequential amendments relating to the exclusions from the market access principles. These amendments, to which the other place have already disagreed, would replace the current Clause 10 with an expansive list of aims, which could be used to justify creating trade barriers for goods in the United Kingdom. The exclusions approach, as originally drafted, 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 that they continue to operate for the particular conditions where they are needed under the bespoke constraints relevant to those circumstances. This targeted approach provides certainty to businesses while ensuring that important or high-risk policy areas, such as chemicals, pesticides or sanitary and phytosanitary measures, can operate effectively.

However, the protections and benefits of the internal market proposals would quickly begin to fade with an expansive list of exclusions for part 1. This would allow unnecessary trade barriers and unjustifiable costs to businesses and consumers. The Government’s view is that a targeted list of exclusions in the Bill, combined with how the principles of mutual recognition and non-discrimination interact, is the best way in which to allow each part of the United Kingdom to meet its respective goals while avoiding unnecessary damage to the UK’s internal market.

The noble Lord’s amendment would not achieve that balance. Although the new list of exclusions that he has presented is slightly changed from his earlier amendment, the list remains very wide. It captures almost all kinds of public policy objectives, and only requires a new regulation “to make a contribution” to any of the aims in the list. This means that almost any regulation proposed by the UK Government or the devolved Administrations in future could be excluded from the scope of the market access principles. The Government reject the idea that a large list of exclusions is needed to preserve standards. The UK Government share with the devolved Administrations commitments to maintaining our existing high standards, whether environmental protection, animal welfare or consumer standards. We will continue to work together on these as a united kingdom as we leave the transition period. We should not forget that the Bill’s design will continue to allow all Governments to innovate, so that new ideas can emerge—as they did with plastic bag charges, for instance—to build better and higher standards for us all, including in the many social policy areas that the noble Lord clearly is concerned about.

I turn to the amendments relating to delegated powers, which underpin the realisation of these market access principles and make sure that they continue to function as effectively as possible. Noble Lords will be aware that the Government’s view remains that these key delegated powers are necessary. My colleague, Minister Scully, successfully argued in the other place that the amendments to remove these powers should be rejected. These powers will ensure that the system continues to evolve, facilitating frictionless trade across the United Kingdom. This will be necessary to react to developments in technology and regulation that cannot be foreseen at present. They also allow the Government to respond rapidly to business and wider stakeholder feedback—for example, to amend the list of exclusions, if implementation shows the need for adjustment.

It is important to note that any of these powers would require an affirmative procedure statutory instrument to be made in Parliament. This will ensure that there is full transparency on any changes and that MPs from all parts of the UK can scrutinise and vote on any changes. Furthermore, these powers are now supplemented by the comprehensive and reasonable package of amendments that we have proposed. This includes new amendments tabled ahead of this debate, giving more certainty on the role of the devolved Administrations in developing changes. I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Stevenson, for their constructive engagement on this matter.

We have listened to your Lordships’ House carefully. Indeed, at Report, we removed the power for the Secretary of State to amend the list of statutory requirements which are in scope of the mutual recognition principle for goods. In this case, having looked again after hearing from your Lordships, we changed our position, having assessed that the removal of the power will not substantially undermine the operation and flexibility of the internal market system.

We have also retabled the Government’s amendment from Report, removing the main affirmative power in relation to the exclusions to part 2. When the other place disagreed with this House’s amendment, removing the main affirmative power and the draft affirmative power, both parts of that power were restored to the Bill. I am happy to make the change that I proposed in my amendment at Report once again. We have also proposed new amendments that give an enhanced role to devolved Administrations in relation to these powers, building on the model proposed by the noble Baroness, Lady Hayter, at Report and ensuring that agreement across all Administrations to the use of the power is achieved whenever possible. The Secretary of State will be required to seek the consent of the devolved Administrations prior to any use of this power. If consent is not provided within one month, the Secretary of State will be able to proceed without that consent but must publish a statement setting out the reasons for proceeding in this way. As this adapts the model that your Lordships previously supported, I hardly need to stress the merits of this approach, which ensures that the devolved Administrations have a say but not a veto. I am hopeful that this time noble Lords will support it. The noble Baroness, Lady Hayter, is nodding; we are in a good place on this one.

Thanks to government amendments introduced at Report that are retabled today, the impact and effectiveness of any use of these powers will be subject to review within five years. A report setting out the conclusions of that review must then be laid before Parliament. I hope this offers comfort to this House that we are taking seriously the concerns that have been raised, and we are working to address them constructively. The uses of the powers to make delegated legislation contained in parts 1 and 2 of the Bill will be scrutinised, not only when they are being laid before Parliament, but also in a more holistic way, after a suitable period has elapsed. This review will again give an opportunity for the devolved Administrations to provide their views.

I briefly address the power to issue guidance, to which we have deliberately taken a more distinct approach. Clause 12 explains that the Secretary of State may issue explanatory guidance on the practical operation of the market access principles for goods. It is not a power to make or amend legislation and, therefore, it differs from other delegated powers in part 1 of the Bill. As part of this process, we will, of course, engage with all the relevant stakeholders, because we are committed to helping regulators and traders to understand the principles and make the best possible use of them. This includes the devolved Administrations, and we are including a legislative commitment to consult them before issuing, amending or withdrawing that guidance. Guidance will not change the rules themselves, so a requirement to seek the consent of devolved Administrations, as proposed for other powers, is not needed.

I urge your Lordships to support all the amendments to these powers, which I hope noble Lords will agree represent a reasonable approach. Crucially, they also enable the internal market system to remain up to date while ensuring the highest degree of scrutiny and accountability. I beg to move.

Motion B1 (as an amendment to Motion B)

Moved by
--- Later in debate ---
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, like the noble Lord, Lord Stevenson, I will take the amendments in the opposite order to the Minister, if the House is happy with that.

The delegated powers issue has almost become a ritual in your Lordships’ House. A Bill is published and in it are many very draconian powers, which seek to change almost everything the Bill can do at the will of the Minister. There is then a report from the DPRRC which condemns it, and then there is a debate and we start to move towards a more reasonable situation. I hope, perhaps, that we can learn from this and maybe cut out a few of the steps, so that we can get to the reasonable situation. The Government have given considerable ground on this, and for that we should all be accepting and reasonable and, I suppose, grateful, although perhaps gratitude is the wrong word.

With respect to Clause 12, I think we will all be watching quite closely to see how those powers are exercised, because advice can come in many forms and we will be seeking to observe that.

The characterisation that these delegated powers are required in order for the Government to react and act with speed has been absolutely confounded by the way in which the Covid crisis has been addressed by the Government. There has been very rapid legislation and very rapid reaction. Looking forward, we have got to a better place than we were in when we started. I still do not think that we would call it perfect, but we have taken a long time to get there.

My reading of the amendment proposed by the noble Lord, Lord Stevenson, is that it is the return of Amendment 21, or at least most of it. Listening to his very reasonable presentation of the amendment and having listened to the debates on Report, I am somewhat surprised that the Government continue to dig their heels in. I can understand that the list in subsection (2) of the proposed new clause might have raised some concerns, and it can of course be subject to negotiation, but as the list now stands—with environmental standards and protection; animal welfare; consumer standards, including digital; employment rights and protections; the health and life of humans, animals or plants; the protection of public health; or equality entitlements—it seems that the Government could not possibly object to it, so I am surprised. The Minister has set out his concerns about an ordered market, but it is very clear that any market that did not observe these things would not be one that we wanted anyway.

With that response, I suggest that we will be supporting the noble Lord, Lord Stevenson, when this Motion is put to a vote. We hope that the Government will be able to have discussions with the noble Lord and others, so that next time they can come back with something much closer to what we have seen today.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank both noble Lords for a good, albeit brief, debate. To summarise, earlier I expressed my concerns about Amendment 8L and the expansive list of exclusions from the market access principles that it introduces. The list that we have included has been carefully drafted to strike what is, in our view, a measured balance. It protects the ability of the devolved Administrations and the UK Government to deliver policy, while avoiding harmful or costly barriers to trade within the UK internal market. The Bill does nothing to stop all nations working together to achieve mutual goals and build on our shared high standards.

On the delegated powers in the Bill, it is not proportionate to remove the Government’s ability to ensure that the list of exclusions and legitimate aims remains appropriate. The Government have already set out a comprehensive package of changes to the delegated powers in the Bill, including for the removal of certain powers and for reviews and reporting to Parliament, and new amendments on the role of the devolved Administrations. This provides for effective transparency and scrutiny of the remaining powers.

We believe that there is a reasonable middle ground here. Many noble Lords tabled and supported amendments to alter, but not remove, the powers in the Bill. We agree with those colleagues. These powers are necessary, and we believe that the changes we have proposed should address their concerns. I therefore hope that noble Lords will be able to support the Government’s approach to reinstating these powers in the Bill.

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14:53

Division 2

Ayes: 295


Labour: 135
Liberal Democrat: 79
Crossbench: 57
Independent: 16
Green Party: 2
Bishops: 2
Conservative: 1
Plaid Cymru: 1

Noes: 250


Conservative: 208
Crossbench: 24
Independent: 9
Democratic Unionist Party: 5
Liberal Democrat: 1
Ulster Unionist Party: 1

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Moved by
Lord Callanan Portrait Lord True
- Hansard - - - Excerpts

That this House do not insist on its Amendments 14 and 52 to 55 to which the Commons have disagreed for their Reason 14A.

14A: Because they were consequential upon Lords Amendments Nos. 42 to 47 and so the changes they made are no longer needed as a result of the Commons disagreement to Lords Amendments Nos. 42 to 47.
Lord True Portrait Lord True (Con)
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My Lords, it seems that I am muted again, but I will find my way to the right spot. I turn now to Part 5 of the Bill. These clauses, as your Lordships may be aware, have been the subject of much debate here and in the other place.

Noble Lords will have seen that the Government announced yesterday that they have reached agreement, in principle, on all of the issues in the UK-EU withdrawal agreement Joint Committee. The Government have been clear throughout that they are committed to implementing the withdrawal agreement and the Northern Ireland protocol. We said that when the Bill was introduced to Parliament and have done so at every stage of its passage. We are also clear that, as a responsible Government, we could not allow the economic integrity of the United Kingdom’s internal market to be compromised inadvertently by unintended consequences of the protocol. That is why, through clauses in this Bill, we have sought limited and reasonable steps to create a legal safety net by taking powers in reserve whereby Ministers could guarantee the integrity of our United Kingdom and ensure that the Government are always able to deliver on their commitments to the people of Northern Ireland.

We sought these measures to guard against the possibility of not reaching agreement with the EU in the Joint Committee. As we have now reached agreement with the EU, I am pleased to say that the clauses which provided for the safety net are no longer needed and the Government are content for them to be removed from the Bill. I refer to Clauses 44, 45 and 47.

None Portrait Noble Lords
- Hansard -

Hear, hear!

Lord True Portrait Lord True (Con)
- Hansard - - - Excerpts

However, as I said in Committee, the clauses that provide for the safety net are not the only ones that make up this part of the Bill. It is vital that the other clauses are passed so that we can deliver on our commitments to the people of Northern Ireland. The protocol is clear that Northern Ireland is part of the UK customs territory, while our manifesto is clear that we would maintain and strengthen the integrity and smooth operation of our internal market. Clause 42 delivers on that commitment by ensuring that all authorities must have special regard to the following fundamental matters when exercising functions that relate to the implementation of the protocol on the movement of goods within the United Kingdom.

The first is the need to maintain the integral place of Northern Ireland in the United Kingdom’s internal market. The second is the need to respect Northern Ireland’s place as a part of the United Kingdom’s customs territory, while the third is the need to facilitate the flow of goods between Great Britain and Northern Ireland. The clause is also entirely in line with the protocol. Indeed, Article 4 states

“Northern Ireland is part of the customs territory of the United Kingdom.”


Article 6 goes on to state

“Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.”


In the recitals it states that the application of the protocol

“should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland”.

This clause delivers on the commitments made in the Government’s manifesto, in the Command Paper published by the Government in May on the implementation of the protocol and on the protocol itself. These are not controversial aims, and indeed some were surprised that your Lordships feel differently.

Let me be clear that as there was some confusion about this in Committee, this clause is not dependent on any other in the Bill. There is no infection or so-called contamination here; it is merely about a Government fulfilling their commitment to the people of Northern Ireland. Indeed, the fact that the Government are seeking to ensure that the clause remains in the Bill, while Clauses 44, 45 and 47 are removed, proves the point. This clause does not provide for or allow for a breach in any way of the withdrawal agreement and is entirely in keeping with the protocol.

I turn now to Clause 43. As I have said, and as noble Lords will know, the Government have committed to providing unfettered access for Northern Ireland’s businesses on multiple occasions. Clause 43 gives effect to that commitment by prohibiting the introduction of new checks and controls on Northern Ireland goods, with some very limited exceptions. This is in keeping with what the Government have said constantly and with what was promised in our manifesto. That commitment is critically important to the businesses and people of Northern Ireland. By including Clause 43 in the Bill, we will protect the vast majority of the £8.1 billion-worth of goods sales from Northern Ireland to Great Britain, and guarantee Northern Ireland’s place in the United Kingdom’s internal market. I hope all of us can now agree on the importance of providing unfettered access for Northern Ireland goods to the rest of the United Kingdom. This clause delivers on that.

As with Clause 42, this clause is not dependent on any other in the Bill. I of course recognise that Clause 43(3)(b) refers to Clause 47, but that is only part of spelling out that it in fact allows checks where applicable international obligations require them. That subsection is being removed. This clause does not provide for or allow for a breach in any way of the withdrawal agreement and it is entirely in keeping with the protocol.

Given the broad support there is for unfettered access, the Government’s repeated commitments to legislate for unfettered access—including in the New Decade, New Approach Deal to restore the Executive, our May Command Paper on our approach to implementing the protocol and the manifesto that brought this Government to office in the last election—and given how important it is to protect access for Northern Ireland businesses to their most important market, it would be hugely disappointing for them and for business certainty in Northern Ireland if noble Lords were to remove these subsections unduly.

I turn to Clause 46. Under state aid rules, notification is the process through which EU member states inform the Commission about state aid or potential state aid. This process will continue to apply to the United Kingdom from 1 January 2021, but in relation only to the limited circumstances where Article 10 of the Northern Ireland protocol applies. This clause simply establishes a statutory requirement that no one besides the Secretary of State may notify the European Commission of state aid or potential state aid. It codifies existing practice in legislation and would not be considered novel or controversial to the Commission, as it is unlikely to accept notification from anyone other than authorised persons.

Motion C1 (as an amendment to Motion C)

Moved by
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Lord True Portrait Lord True (Con)
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My Lords, I am not a lawyer, as I am frequently reminded in your Lordships’ House, but I am a historian by vocation and occasional practice, and I know that history is the study of cause and effect. I have heard one version of a proto-history just put to us by the noble and learned Lord, Lord Falconer; there are many other versions which no doubt could and will be put—indeed, some have been put in this debate. The thing to do now is to move forward. Once all the documents are revealed, no doubt people will be able to say what had an effect on what. We are here today to make a judgment on carrying draft legislation, a Bill, forward.

I, too, welcome prodigal sons, and indeed prodigal daughters, if I may say so. The noble and learned Lord was kind enough to say that the Government had graciously changed their position. I heard less comment in the debate—although the noble Lord, Lord Dodds, and the noble Baroness, Lady Hoey, referred to it—about the change of mind, if I may use the phrase, by your Lordships. I hope it is forthcoming on Clauses 42, 43 and 46. I welcome that change of mind. I do not believe that unfettered access should have been called into doubt in your Lordships’ House, and I heard no one speak against that principle, although the noble Lord, Lord Newby, appeared at one moment to exult in the idea that it might not exist. I welcome and am grateful for what I hope will be the change of mind on those other clauses, and I hope that the noble and learned Lord, Lord Judge, will be able to confirm that.

I thank all those who have contributed to the debate. I must say to the noble Lord, Lord Adonis, although I do not want to pick him out particularly, that I do not think that, whoever he or she may be, personal vilification of the Prime Minister is a conducive or beneficial way to broaden consensus in debate in your Lordships’ House. I counsel the noble Lord that vilification of the current Prime Minister will not particularly persuade me to listen to his arguments.

As I said in my opening speech—I thank noble Lords for their comments on the facts of it, not the speech —the Government will not be opposing the removal of Clauses 44, 45 and 47. I can confirm to the noble and learned Lord that new Clause 45 is in accordance with the rule of law. However, as I have argued, the remaining clauses in the Bill are vital to the Government delivering on their commitments to the people of Northern Ireland.

I must say to the noble Baroness, Lady Hoey, that I will be repeating a Statement tomorrow, and I will obviously answer questions on that matter. I am sorry, but I do not make the rules and customs of the usual channels in this place, but I understand her feeling, and no doubt she will examine that Statement tomorrow. I do not think I am telling anybody anything that they do not know when I say that, unfortunately, that Statement will be repeated relatively late tomorrow.

The clauses which I hope your Lordships will allow to return seek to protect Northern Ireland’s place in the UK’s customs territory and internal market, and that is something, as the noble Lord, Lord Dodds, recited, that not only this Government and the Northern Ireland Executive but the EU absolutely committed to—unfettered access, so please let us see that back in the Bill.

Whatever the rights and wrongs of the history, I hope that the reality of the day is that people in different parts of this House will be able to have some satisfaction in where we have reached at this point. I always agree that, in life, negotiation is desirable. As I said in my opening remarks, Clauses 42, 43 and 46 have now been sent to us twice by the democratically elected House, and on those I urge your Lordships, if the Question is put, not to vote them out again. I beg to move.

Lord Judge Portrait Lord Judge (CB)
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I do not think there is anything I could usefully add; I think we should get on.

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Moved by
Lord Callanan Portrait Lord True
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That this House do not insist on its Amendment 42 to which the Commons have disagreed for their Reason 42A.

42A: Because clause 42 protects Northern Ireland’s place in the United Kingdom’s customs territory, as provided for under the Northern Ireland Protocol.
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Moved by
Lord Callanan Portrait Lord True
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That this House do not insist on its Amendment 43 to which the Commons have disagreed and do agree with the Commons in their Amendments 43A and 43B.

43A: Clause 43, page 34, line 42, at end insert “, or
(i) is necessary for the purpose of dealing with a threat to food or feed safety in Great Britain.”
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Moved by
Lord Callanan Portrait Lord True
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That this House do insist on its Amendment 44 to which the Commons have disagreed for their Reason 44A.

44A: Because the regulation-making power conferred by clause 44 provides a necessary safety net to ensure Ministers can secure that qualifying Northern Ireland goods have full, unfettered access to the whole of the UK internal market.
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Moved by
Lord Callanan Portrait Lord True
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That this House do insist on its Amendment 45 to which the Commons have disagreed for their Reason 45A.

45A: Because it is necessary for the Secretary of State to have the power to ensure there is no confusion or ambiguity in UK law about the interpretation of Article 10 of the Northern Ireland Protocol.
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Moved by
Lord Callanan Portrait Lord True
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That this House do not insist on its Amendment 46 to which the Commons have disagreed for their Reason 46A.

46A: Because it is necessary to codify in legislation the existing practice, whereby aid is notified to the European Commission by the Foreign Secretary through the United Kingdom Mission in Brussels.
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Moved by
Lord Callanan Portrait Lord True
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That this House do insist on its Amendment 47 to which the Commons have disagreed for their Reason 47A.

47A: Because the Commons consider it necessary, in order to avoid confusion in domestic law about clauses 44 and 45 and regulations made under them and provide clarity for courts, businesses, and public bodies, for those clauses and regulations to have effect notwithstanding possible inconsistency or incompatibility with any relevant national or international law.
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16:39

Division 3

Ayes: 305


Labour: 143
Liberal Democrat: 78
Crossbench: 62
Independent: 16
Green Party: 2
Plaid Cymru: 1

Noes: 236


Conservative: 207
Crossbench: 16
Independent: 7
Democratic Unionist Party: 5
Ulster Unionist Party: 1

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Moved by
Lord Callanan Portrait Lord Callanan
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That this House do not insist on its Amendments 50, 57 and 61 to which the Commons have disagreed for their Reasons 50A and 57A, but do propose Amendment 50B in lieu—

Commons Reasons

50A: Because it would involve a charge on the public funds and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.
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50B: After Clause 40, insert the following new Clause—
40A Duty to review arrangements for carrying out Part 4 functions
(1) The Secretary of State must, within the permitted period—
(a) carry out a review of the appropriateness, for the purpose of securing the most effective and efficient performance of the Part 4 functions, of—
(i) the provision made by section 30(1) and the amendments made by Schedule 3, and
(ii) any arrangements made under or in connection with that provision and those amendments;
(b) prepare a report of the review (see subsection (4) for specific requirements relating to the report), and
(c) lay a copy of the report before Parliament, the Scottish Parliament, Senedd Cymru and the Northern Ireland Assembly.
(2) The review must, among other things, assess—
(a) the way in which Part 4 functions have been carried out by the CMA through Office for the Internal Market task groups authorised under section 30(1), and
(b) any advantages or disadvantages of continuing with—
(i) the provision made by section 30 and the amendments made by Schedule 3, and
(ii) the arrangements made under or in connection with that provision or those amendments,
as compared with other possible ways of providing for the Part 4 functions to be carried out (including possible arrangements not involving the CMA).
(3) In carrying out the review the Secretary of State must consult the other relevant national authorities.
(4) Before finalising the report required by subsection (1)(b) the Secretary of State must—
(a) send a draft of the proposed report to each of the other relevant national authorities, inviting the authority to make representations as to the content of the proposed report within a period specified by the Secretary of State, and
(b) consider any representations duly made in response to that invitation and determine whether to alter the report in the light of that consideration.
(5) The Secretary of State need not consult the devolved authorities further if the draft is altered as mentioned in subsection (4)(b) (but is free to do so if the Secretary of State thinks fit).
(6) The permitted period for the review is the period beginning with the third anniversary of the day on which section 30 comes into force (or first comes into force to any extent) and ending with the fifth anniversary.
(7) In this section “Part 4 functions” means functions of the CMA under this Part.”
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, I now turn to the amendments on the office for the internal market and the subsidy control grouping.

First, I want to emphasise that Part 4 establishes the office for the internal market within the Competition and Markets Authority, which is, in our view, a natural home for the OIM, given its existing technical expertise that is highly relevant to the operation of the UK internal market. But, as I have set out, the office for the internal market will be independently governed within the CMA, and Schedule 3 sets out a carefully balanced set of governance arrangements which guarantee that independence and ensure a meaningful role for the devolved Administrations through the appointments process to the OIM panel. This gives the devolved Administrations a proper voice, while guaranteeing that the OIM can operate without delay or obstruction if four-nation consensus cannot be reached on appointments.

The Government have listened carefully to the discussions in this House and have acted, tabling a number of pragmatic and constructive amendments throughout Part 4. These make it clear that the OIM will work in the interests of consumers and ensure that it will operate in the interests of all parts of the United Kingdom and on an equal basis towards the four UK Administrations. This is further to the significant change put forward previously, requiring the Secretary of State to seek consent from all Administrations within a one-month timeframe, based on proposals developed originally by the Welsh Government. This change provides yet another enhancement for the devolved Administrations in the appointment process, which, as I have explained, fully reflects the even-handed approach to governance that runs throughout Schedule 3.

I hope your Lordships can appreciate that the Government have listened and moved accordingly. However, I cannot support your Lordships’ Amendments 57 and 61, which go further than this, requiring direct devolved Administration appointments to the CMA board. As already set out here and in the other place, it is the OIM panel that will undertake the work of the OIM. The CMA board is responsible for the operations of the organisation as a whole, which otherwise fall wholly within reserved competence. It is therefore not appropriate for the devolved Administrations to make appointments to the CMA board, as those board members would, in consequence, be involved in a range of reserved matters with no relation to the OIM functions set out in Part 4.

With regard to Amendment 50, your Lordships will be aware that this has invoked a financial privilege claim and has not been agreed to by the other place. Although this of course is sufficient in itself, I will remind your Lordships’ House that there is a consultation forthcoming on this matter of subsidy control. It would be premature and unjustified to agree to confer specific regulatory functions on the OIM in respect of subsidies before the wider details of any legislative UK domestic subsidy control regime—including the appropriate mechanism for oversight and enforcement—have even been developed and brought before Parliament, let alone agreed.

However, I have listened to concerns regarding the decision to have the CMA perform these duties, and I am pleased to announce that the Government have tabled Amendment 50B, which will require the Secretary of State to review, after between three and five years and in close consultation with the devolved Administrations, the appropriateness of, effectiveness of and potential alternatives to the CMA carrying out its Part 4 functions. This will allow Ministers from all Administrations to closely consider the CMA’s performance and the pros and cons of continuing with the CMA as the delivery vehicle for the Part 4 functions. This proposal makes it clear that the Government are committed to ensuring due diligence on the CMA’s new functions and facilitating further scrutiny by all Administrations.

This amendment requires the devolved Administrations to be consulted as the review is carried out—but it goes further, giving the Administrations the right to consider and make representations on the draft report itself, and requiring the Government to fully consider those views. Subsection (5) rules out an unlimited obligation to consider repeated rounds of representations that could block the review, but I want to be clear that the Government will consider all views offered in good faith. I note for the benefit of noble Lords that this final point applies equally to Clause 50—to which I will now turn—which reserves to the UK Parliament the exclusive ability to legislate for a UK-wide subsidy control regime in future.

I was pleased to note in the debate on Report that many noble Lords did in fact recognise the importance of maintaining a consistent approach in what is a nationally significant area of economic policy. In addition, I welcome the devolved Administrations’ support for the principle of a unified approach to subsidy control throughout the United Kingdom. For these reasons, the Government believe it is right that we retain the provisions for the reservation of subsidy control in the Bill.

Now we have left the EU, it is important that we continue to take a coherent approach to the system that governs how public authorities subsidise business across the UK. I reiterate that this reservation is not about sources of funding or who makes decisions on individual subsidies across the UK. This reservation will ensure that any future system we put in place to regulate against the distortive or harmful effects of spending on subsidies then applies to the whole of the UK.

A unified approach to that overall framework will reduce uncertainty for UK businesses and prevent additional costs to supply chains and consumers. As such, continuing our UK-wide approach to subsidy control and confirming it in law remains the best way to ensure that we continue to take a consistent approach to regulating the harmful effects of subsidies across the United Kingdom.

To be clear, all UK public authorities are and will remain responsible for their own spending decisions on subsidies—how much, to whom and for what—within any overall subsidy control regime. This reservation is not seeking to change public authorities’ responsibilities for spending decisions. However, the wider rules which they operate should continue to be consistent across the United Kingdom.

I acknowledge the concerns that some of your Lordships have raised in previous debates regarding the principle of reserving a policy area in advance of the forthcoming consultation the Government have committed to publish. However, this reservation is a necessary step to ensure that, if a legislative regime were introduced, it would apply then to the whole of the UK. Given that this is a national issue, the future subsidy control mechanism should be the responsibility of the UK Parliament to determine.

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A very good way of showing the Government’s commitment would be, as the noble and learned Lord, Lord Thomas, said, to accept his amendment on asking the common frameworks group to come forward with a proposal for state aid. As he pointed out, there is time. It is not a pressing issue, because we know now that we are operating on the basis of the WTO rules in the interim. If that works, why should we not take the time to go forward with this? Let us test the commitment, resolve and enthusiasm for the common frameworks through this good process of operating a common framework for state aid in short time, and to completion. If that can be done, and if the offer made by both the Scottish and Welsh Governments to hold back on any measures that might interfere with it in the intervening period is attractive, the Government have a win-win situation and I recommend it.
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, I thank all noble Lords who have contributed to what was another short but powerful debate. I have listened carefully to the points that have been made. I will set out in my closing remarks why I cannot support Amendments 51, 57 and 61 in the name of the noble Baroness, Lady Finlay. Turning first to the OIM, I emphasise that the Government have listened and responded directly to points made in this House. This is reflected in the meaningful changes made throughout Part 4. They include putting beyond doubt that the OIM will work in the interests of consumers, and making it clear that its functions will be available to the benefit of all parts of the UK, and for all Administrations, on an equal basis.

The Government have recognised the need for the devolved Administrations to be closely involved in OIM panel appointments. That is why the proposal for a one-month consent requirement on OIM panel appointments with the devolved Administrations is being introduced, providing them with an enhanced role in the process. This amendment originated with the Welsh Government.

Finally, the Government have tabled an amendment that will require a review and a report between three and five years after the CMA takes on the Part 4 functions. This will examine the way in which the CMA has carried out these functions, and the devolved Administrations will be closely involved throughout. The review and the report will provide the necessary assurances that the operation of the OIM within the CMA will be closely scrutinised, providing enhanced transparency and accountability to all four UK Administrations.

I will reply to the point made by the noble Baroness, Lady Finlay: in seeking to go further than a normal requirement to consult the devolved Administrations on the review of the OIM, the Government have included an additional and explicit requirement to share and allow for representations on the resulting draft report. As I have said, providing that the Government are not required to follow this operation an unlimited number of times is simply intended to prevent a procedural impossibility if no consensus is reached. I am happy to say again that all views offered in good faith will be considered by the Government in preparing their report, as required in the proposed clause. The amendment makes clear that the Government have the option of sharing as many drafts and considering as many rounds of representations as are appropriate and feasible in the circumstances.

I am happy to assure my noble friend Lady Neville-Rolfe that these proposed reviews would assess the pros and cons of the CMA as the delivery vehicle of the OIM, including whether possible arrangements not involving the CMA could carry out the Part 4 functions in the future.

I turn to the knotty issue of subsidy control. The purpose of this reservation is to provide stability and continuity as we move forward in forging a new UK-wide subsidy control regime. This Bill continues the UK-wide approach to subsidy control and confirms this in law. State aid has never been a devolved issue, as I have said on a number of occasions, and this reservation will ensure that we can continue to take a uniform approach to subsidy control across the UK. I reiterate that, in practice, nothing will change for the devolved Administrations. All UK public bodies, including the devolved Administrations and in the areas that the noble Lord, Lord Liddle, highlighted, will still have responsibility for spending decisions on subsidies and should make these in a way that is consistent with the overall approach taken across the United Kingdom.

In the coming months, we intend to publish a consultation on whether we should go further than our World Trade Organization and international commitments, including whether further legislation is necessary. We will take the necessary time to listen closely to the devolved Administrations and design a system that promotes a competitive and dynamic economy throughout the whole of the United Kingdom.

The proposed amendment makes clear that the UK Government are committed to involving the devolved Administrations in the forthcoming development of proposals for a UK-wide subsidy control regime. We recognise the importance of working constructively and co-operatively in this policy area, and it is in all our interests that a new regime works to the benefit of the whole country. That is why the Government cannot agree with Amendments 50C, 51, 57 and 61, so I urge noble Lords to accept Amendments 50B and 51B put forward in my name and reject the others.

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17:42

Division 4

Ayes: 313


Labour: 141
Liberal Democrat: 82
Crossbench: 64
Independent: 16
Democratic Unionist Party: 4
Green Party: 2
Plaid Cymru: 1

Noes: 236


Conservative: 207
Crossbench: 20
Independent: 7
Democratic Unionist Party: 1

Motion M
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

Moved by

That this House do not insist on its Amendment 51 to which the Commons have disagreed for their Reason 51A, but do propose the following amendment in lieu—

Commons Reason

51A: Because it is necessary to reserve to the United Kingdom Parliament the right to legislate for a system to regulate the provision by public bodies of subsidies which are or may be distortive or harmful and to avoid the risk of inconsistent regulation of such subsidies in the different parts of the United Kingdom.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Consideration of Lords amendments
Thursday 10th December 2020

(3 years, 3 months ago)

Commons Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Commons Consideration of Lords Message as at 10 December 2020 - (10 Dec 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Paul Scully Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
- Hansard - - - Excerpts

I beg to move,

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

Rosie Winterton Portrait Madam Deputy Speaker (Dame Rosie Winterton)
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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 Portrait Paul Scully
- Hansard - - - Excerpts

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 Portrait Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
- Hansard - - - Excerpts

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 Portrait Paul Scully
- Hansard - - - Excerpts

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 Portrait Alan Brown (Kilmarnock and Loudoun) (SNP)
- Hansard - - - Excerpts

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 Portrait Paul Scully
- Hansard - - - Excerpts

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 Portrait Paul Scully
- Hansard - - - Excerpts

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.

William Cash Portrait Sir William Cash
- Hansard - - - Excerpts

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 Portrait Paul Scully
- Hansard - - - Excerpts

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.

Nigel Evans Portrait Mr Deputy Speaker (Mr Nigel Evans)
- Hansard - - - Excerpts

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

Question put.

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14:33

Division 184

Ayes: 356


Conservative: 350
Democratic Unionist Party: 6

Noes: 259


Labour: 192
Scottish National Party: 47
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Resolved,
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14:45

Division 185

Ayes: 357


Conservative: 351
Democratic Unionist Party: 6

Noes: 259


Labour: 192
Scottish National Party: 47
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Resolved,
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14:59

Division 186

Ayes: 358


Conservative: 352
Democratic Unionist Party: 6

Noes: 260


Labour: 195
Scottish National Party: 45
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Resolved,

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Consideration of Commons amendments
Monday 14th December 2020

(3 years, 3 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 158-I Marshalled list for consideration of Commons reasons and amendments - (11 Dec 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
Lord True Portrait Lord True
- Hansard - - - Excerpts

That this House do not insist on its Amendments 1B, 1C and 1D to which the Commons have disagreed for their Reason 1E.

1E: Because the Lords Amendments will create legal uncertainty, which would be disruptive to business.

Lord True Portrait The Minister of State, Cabinet Office (Lord True) (Con)
- Hansard - - - Excerpts

My Lords, I will address Amendments 1F, 1G, 1H, 1J, 1K and 1L. Last week, the other place was clear in its disagreement with Amendments 1B, 1C and 1D when it removed them from this Bill.

I appreciate the ongoing contributions of noble Lords to these debates on the interactions between the market access principles and common frameworks. I very much welcome the constructive engagement we have had on this issue since last Wednesday. In particular, I thank the noble and learned Lord, Lord Hope, for his continued contribution and for his willingness to engage in ongoing dialogue on his amendments, which he has tabled in lieu.

There have also been constructive conversations with the Labour Front Bench over the past week, for which I am grateful. I look forward to continuing discussions with the noble Baroness opposite and the noble Lord, Lord Stevenson of Balmacara, in seeking to bridge the gap between our two positions. I should also express my appreciation of the helpful contributions and advice from my noble and learned friend Lord Mackay of Clashfern.

As I said in the House last week, the previous amendments from the noble and learned Lord, Lord Hope, would have created a broad regime of exclusions from the market access principles, which would have denied businesses and consumers much-needed clarity regarding the terms of trade within which they operate. The Government have been clear throughout these debates that we agree on the need for an exclusions regime, but one that is carefully drafted and provides certainty for business. In drafting the Bill, specifically Clauses 10 and 17, the Government have designed an exclusions approach that achieves a careful balance.

I understand the aim of the noble and learned Lord’s revision to his amendment, which is to further specify the interaction between divergence agreed under common frameworks and exclusions to the market access principles. However, our assessment remains that the approach in these amendments goes too far in both the breadth of the exclusions it may require the Secretary of State to create and the uncertainty it could lead to. This runs counter to the certainty that the Bill is designed to provide.

To further emphasise the Government’s position, I will take the opportunity to clarify some of the points noble Lords raised during our debate last week. The noble and learned Lord, Lord Hope of Craighead, expressed concern that traders may need to consider relevant regulations in different parts of the United Kingdom. I reiterate that the mutual recognition principle provides reassurance for traders, in that as long as they comply with local relevant requirements they do not need to worry about those other parts. This is the advantage of our proposed approach: we have carefully created an architecture that means that a trader will have clarity regarding the rules they should follow. As I have said before, the uncertainty introduced by the wholesale exclusions from the market access principles afforded by the amendment should not be supported by the House.

The common frameworks process will encourage a conversation about a common approach and so provide for consensus-based decision-making in sectoral areas of the economy. However, the Government believe that common frameworks on their own cannot determine where matters should or should not be in scope of the market access principles. That is a job for the UK Parliament and for MPs from the whole of the United Kingdom.

The Government also believe that the system they have designed should create a proper balance between the independent operation of devolved powers and the automatic application of the principles that protect the market and give certainty. The Government have been clear in Parliament about our commitment to the common frameworks programme, which I repeat today, and the value we attach to the fora that common frameworks provide for collaborative working with the devolved Administrations. As noble Lords are aware, the common frameworks programme provides an avenue for discussing ways of working and as such is primarily concerned with processes rather than determining specific policy outcomes.

The programme aims to put in place durable arrangements for intergovernmental working between the Government and the devolved Administrations, and our intention remains that these mechanisms for co-operation on specific policy areas will allow for coherent policy-making between the UK Government and the devolved Administrations in those policy areas. For this reason, we think that the common frameworks programme is complementary to the mechanisms set out in the Bill, and I respectfully suggest again that the approach put forward in the amendments is contrary to the Government’s responsibility to provide businesses with the certainty they need to operate across the United Kingdom. I repeat my gratitude to other noble Lords for the constructive conversations that have been taking place.

Motion A1 (as an amendment to Motion A)

Moved by
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Lord True Portrait Lord True (Con)
- Hansard - - - Excerpts

My Lords, once again, I am very grateful to those who have contributed to the debate. Although the cast is smaller, I know that the interest is no less great. The sense of respect for the devolved institutions, which has gone right across your Lordships’ debates on the Bill, is important and shared by all of us, however we view the question raised in the amendments.

I also thank all those who have participated in the ongoing dialogue outside your Lordships’ House on this matter. Naturally, I will shortly seek to persuade your Lordships not to support the noble and learned Lord’s Motion for the reasons I have given, but the strength of feeling expressed in this House and in the other place is testament to the important role that common frameworks play in intergovernmental working and this country’s future outside the European Union, and indeed within the overall structure of intergovernmental relations within the United Kingdom.

The Government are committed to working with the devolved Administrations to deliver these agreements to the benefit of people from all four corners of the United Kingdom, and we welcome the strong support that has been shown for common frameworks by both Houses, not least by the noble and learned Lord, Lord Hope of Craighead, in his noble efforts to unwrap a Christmas parcel. I am sure that the jewel of mutual respect is there, whatever the outcome of the debates on this question.

Common frameworks allow the Government and the devolved Administrations to engage in meaningful dialogue about how all parts of the country can benefit from the new powers flowing from the European Union. I say to the noble Baroness opposite that they are flowing from the European Union. However, common frameworks are primarily concerned with processes rather than determining specific policy outcomes, and as such they do not obviate the need for the market access principles in these areas. I believe it is common ground across this Chamber that it is for the United Kingdom Parliament and its Members from all four nations to have a role in safeguarding a market across all parts of the United Kingdom.

Common frameworks are not intended to be an all-encompassing solution to the maintenance of that internal market. The Government’s belief is that additional legislative protection provided by this Bill will provide certainty for the status quo of internal UK trade. Broad disapplication of elements of the Bill risks removing that certainty, which is needed for business and citizens in all four parts of the United Kingdom. Again, I believe that is a common objective. For that reason, we believe both common frameworks and the market access principles—if the word “complementary” is not cared for, I will say “working in tandem”—to be necessary to guarantee the integrity of the entire United Kingdom internal market.

The security that this Bill provides is crucial for the people and businesses of England, Scotland, Wales and Northern Ireland. It is essential that we ensure that this certainty is provided in all areas, including in the devolved policy areas, where powers flow from the European Union to London, Edinburgh, Cardiff and Belfast.

Of course, I hear the arguments and representations put forward in the characteristically modest approach of the noble and learned Lord, Lord Hope of Craighead, but the Government’s belief is that we cannot afford to risk denying our citizens the ability to trade seamlessly across the United Kingdom, as they do now. I hope this is something that your Lordships’ House can agree with, and I hope that, in order to provide this certainty, the noble and learned Lord will find himself able to withdraw his Motion. In the event that he is unable to do so, the remarks that I made earlier obviously stand.

Lord Hope of Craighead Portrait Lord Hope of Craighead (CB) [V]
- Hansard - - - Excerpts

My Lords, I am grateful to those who have contributed to this short debate. I would like to pick up on some words that the Minister said in his reply. The words “mutual respect” have characterised the meetings that I have been privileged to take part in as we have moved towards the position that I am adopting. I think it is a very healthy system that allows us to conduct these discussions in such a manner as we seek out the positions that each of us is trying to adopt and possible ways of accommodating them.

At the end of the day, as I have said on a number of occasions, it really is up to the Government. I am looking to them to facilitate in some way the process by which an agreed decision to diverge, which has gone through all the processes of the common frameworks system, may be protected against the sharp edges of the internal market principles. I do not believe that that will in any way disrupt the workings of the internal market; indeed, there are benefits from allowing the devolved Administrations to develop their ideas in a way that is consistent with the internal market by the use of this process and the opportunity for divergence that it allows for.

The Minister has invited me to withdraw my Motion, but in truth I cannot properly do that, given that we are in a process of continuing discussion and we have not yet had a proposal from the Government that provides a solution to the problem that I am seeking to address in my amendments. For those reasons, I wish to test the opinion of the House.

--- Later in debate ---
15:51

Division 1

Ayes: 332


Labour: 138
Crossbench: 83
Liberal Democrat: 80
Independent: 20
Conservative: 5
Green Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 229


Conservative: 201
Crossbench: 11
Independent: 8
Democratic Unionist Party: 5
Labour: 2

--- Later in debate ---
Moved by
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

That this House do not insist on its Amendment 8L to which the Commons have disagreed, do not insist on its insistence on its Amendments 13 and 56 to which the Commons have insisted on their disagreement, and do agree with the Commons in their Amendment 15C.

15C: Clause 10, page 7, line 25, at end insert—


“(4) Before making regulations under subsection (2), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.


(5) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.


(6) If regulations are made in reliance on subsection (5), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

My Lords, this group covers Amendment 8M, which relates to exclusions from the market access principles. The noble Lord, Lord Stevenson, has made changes to the amendment since the debate was last in this House. These move the proposed exclusions text from Clause 10 to Schedule 1 and narrow the list of reasons for derogating from the market access principles to two: environmental standards and protection, and the protection of public health.

While this acknowledgement of the issues created by replacing Clause 10 with a lengthy list of exclusions is appreciated by the Government, it does not address our fundamental problems with this approach. The noble Lord’s Amendment 8M would cut right across the Government’s objectives and leave businesses exposed to new burdens and barriers. Despite the reduced list of aims, vast amounts of public policy could be excluded from the market access principles.

I have previously explained that the narrow approach to exclusions that we have taken ensures that certain policy areas can work effectively within the clearly defined market access principles. Many of these, such as the exclusion relating to threats to human, animal or plant health, will ensure that necessary environmental and public health measures can continue to operate under the bespoke constraints necessary in those areas, all without the need for the wide-ranging environmental and public health derogations which the amendment, even in its revised form, would add to Schedule 1.

However, the way in which the noble Lord’s list of exclusions would work with the test in his proposed new paragraph is also problematic, as I shall explain. To be excluded, a requirement must only “make a contribution to” the achievement of one of the aims from the list, meaning that a policy need only have an extremely tangential relationship to a social policy objective to be taken out of scope.

The amendment would also lead to uncertainty as to when the market access principles applied, not least by a very unusual use of the term “proportionate”. It would fall to courts to determine the relative extents to which different policies met one of the aims, with no consideration of the burdens introduced. This would not deliver the certainty that business needs. The amendment could bring blatantly protectionist measures out of scope of the market access principles because it was unclear what “disguised restriction on trade” meant. We cannot accept protectionism within the UK.

In the previous debate, the noble Lord, Lord Stevenson, also raised the differences with the EU system. It should be quite clear that the EU system is designed for different circumstances—that is, bringing together 27 countries. Now that we are an independent trading nation, the market access principles are naturally more tailored for the UK than they were in the EU system, so it is right that the approach to exclusions in this Bill should be more narrowly focused.

However, I must stress the following point to the House: the market access principles do not prevent the devolved Administrations introducing innovative policies designed to meet their own goals and objectives, including those relating to the environment and public health. We are adamant that requirements which prohibit the sale of a particular good should generally be in scope of the mutual recognition principle; otherwise, we would see a decrease in consumer choice, increased prices and additional costs for business. This is an outcome that I do not believe your Lordships desire, nor is it a good one for the citizens of the United Kingdom.

Of course, if there are initiatives that are of serious concern to the UK Government and the devolved Administrations, we should work together as a United Kingdom to implement them. Furthermore, manner of sale policies, which have typically been the most innovative types of policy, will not be impacted by the market access principles as long as they do not discriminate and are not designed specifically to circumvent mutual recognition. This covers innovative policies such as plastic bag charges and minimum unit alcohol pricing, which many noble Lords have cited. In this respect, our system has much greater flexibility in these areas than the current EU system would allow.

For all these reasons, I strongly encourage noble Lords to reject Amendment 8M.

--- Later in debate ---
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I welcome the noble Baroness, Lady Bennett, back to her seat—just in time for tier 3 to arrive. We have again had a short debate. As we have seen the evolution of this argument—in the amendment’s approach to common frameworks it is, in a sense, the yin to the yang of the noble and learned Lord, Lord Hope—we are now looking at a different way of trying to ensure that diversity can survive under the automation of the market access measures.

In the past, the Minister has brought to bear the Government’s disapproval of the breadth of the exclusions that previous versions of this amendment made. As the noble Baroness, Lady Bennett, pointed out, many of those have now dropped off. So, in a sense, the Government have already pushed this to a narrower set of exclusions. The Minister highlighted his uncertainty around the word “proportionate”. Of course, none of us would want to do something disproportionate, but I cannot help thinking that the Government, in all their wisdom and with all their clever legal people, could come up with a frame of words that will prevent hideous problems developing in the courts—so I cannot help thinking that that is something of a red herring.

As the noble Lord, Lord Stevenson, said, this is getting more modest than was previously attempted, but it still has the overriding aim of dealing with the problem which keeps coming up throughout this debate. The Minister has magnanimously said that the devolved authorities are perfectly at liberty to develop new and innovative ways of doing things—so far, so good—and then, of course, the market access principles mean that those innovations will get undercut if someone else in the British Isles is doing it differently. I do not understand how the Minister can keep linking those two sentences without seeing that the one excludes the other. If it does not do it in governmental terms, it will do it in the courts. This will be a creature of the courts, because there will be businesses that will be going at a legal opportunity to get their products into devolved authorities that have sought to raise standards, as they see it.

The issue of minimum-unit alcohol pricing often comes up, and it is quite clear that this legislation will not affect that at all. We are all in agreement there. But if we were seeking to bring that in once this legislation was in place, what chance would it have of surviving the courts? That is why we will support this amendment.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

I thank everybody who has contributed to what has been a very good, albeit brief, debate. I have listened very carefully to the points that have been raised, and I will respond directly to the points of the noble Lords, Lord Stevenson and Lord Fox. Innovative policy-making relating to public health and the environment will be fully possible under the Bill, within the clearly defined market access principles. Schedule 1 sets out a clear exclusion process for:

“Threats to human, animal or plant health”.


There are also several other exclusions relating to the environment and public health: chemicals and pesticides, for example. All of these are drafted tightly to strike the right balance between these objectives and the integrity of the market.

It is also essential to remember that neither of the market access principles affects the devolved Administrations’ abilities to uphold and enforce rules governing how consumers use goods. Neither would they prevent reasonable “manner of sale” restrictions, as long as they are not discriminatory. If an Administration wanted to introduce minimum alcohol pricing or the plastic bag charges, they are fully able to do so and can use them to fulfil environmental or public health aims in future; the principles would not be an obstacle to that, as long as those rules do not discriminate. I say to the noble Baroness, Lady Bennett, that she is wrong: if a future devolved Administration wanted to introduce the plastic bag charges, they would be able to do so under these market access principles, as long as they were non-discriminatory.

--- Later in debate ---
16:34

Division 2

Ayes: 302


Labour: 135
Liberal Democrat: 81
Crossbench: 64
Independent: 17
Green Party: 2
Plaid Cymru: 1

Noes: 254


Conservative: 211
Crossbench: 27
Independent: 9
Democratic Unionist Party: 5
Ulster Unionist Party: 2

--- Later in debate ---
Moved by
Lord True Portrait Lord True
- Hansard - - - Excerpts

That this House do not insist on its insistence on its Amendments 14, 52, 53 and 54 to which the Commons have insisted on their disagreement for their Reason 14C.

14C: Because the Lords Amendments (together with Lords Amendment 55 which has been agreed by both Houses) were only made in consequence of the omission of Part 5 by Lords Amendments 42 to 47 and so have become unnecessary following the Lords non-insistence on Lords Amendments 42, 43 and 46.

Lord True Portrait Lord True (Con)
- Hansard - - - Excerpts

My Lords, I am introducing a new government amendment, containing new Clause 43A, as well as moving Motions C, D and E, which will rectify the oddities left by the removal of Clauses 44, 45 and 47. Now that we have an agreement in principle with the European Union through the joint committee, as we discussed in the last round of these discussions in your Lordships’ House, the safety net clauses are no longer required.

The EU’s declaration on Article 10 of the Northern Ireland protocol clarifies that subsidies are within scope of the state aid rules in the protocol only where there is a “genuine and direct link” to Northern Ireland and a “real and foreseeable” impact on trade between Northern Ireland and the European Union. The House has been concerned, as has the other place, about the risk of reach-back; the EU’s clarification addresses this. The concern was that a company in Great Britain with only a peripheral link to commercial operations in Northern Ireland could be caught inadvertently by the tests within the protocol’s text, which was neither acceptable nor what the protocol had envisaged.

However, public authorities giving subsidies and the beneficiaries still need guidance regarding Article 10 of the protocol. Therefore, new Clause 43A stipulates:

“The Secretary of State must publish guidance on the practical application of Article 10”.


The clause requires the Secretary of State’s guidance to reflect any relevant decision or recommendation of the joint committee or any declaration made by either party of which the other party takes note. The Secretary of State may update the guidance, for example, to reflect developments in either the joint committee or relevant EU law. Public authorities will be required to have regard to this guidance, helping to ensure a consistent and uniform application of Article 10. This approach is fully in accordance with the United Kingdom Government’s commitments under the Northern Ireland protocol and international and domestic law. The new clause is an important part of putting the protocol into effect and for the agreement in principle with the European Union to function.

I know that noble Lords have welcomed progress on this part of the Bill, and I beg to move.

Lord Judge Portrait Lord Judge (CB) [V]
- Hansard - - - Excerpts

My Lords, I speak to Clause 43A. Consistent with the Minister’s undertaking last week, this new clause is not tainted with the admitted unlawfulness that marked Clauses 44, 45 and 47. By way of a footnote, in view of the Minister’s observation, I will say that those clauses should never have been there in the first place. As the Minister has explained, this clause is concerned with the issuing of guidance by the Secretary of State in relation to Article 10 of the Northern Ireland protocol, and any subsequent implementation of that guidance. Either process must pay full attention to the decisions and recommendations of the joint committee, itself established under Article 164 of the withdrawal agreement. Non-compliance, if it were to arise, would, if necessary, be justiciable.

There is nothing further that I can say in relation to this clause. It seems to be a very sensible solution to a difficult problem.

Lord Falconer of Thoroton Portrait Lord Falconer of Thoroton (Lab)
- Hansard - - - Excerpts

The noble Lord, Lord True, has been true to his word. He has produced Clause 43A, which does not contain any element of illegality, as the noble and learned Lord, Lord Judge, said. I also agree with the noble and learned Lord that it is a sensible provision and we welcome it. It brings to an end a saga for which this country has plainly paid a price. Everybody commenting on the position of the European Union at the moment is saying that the reason it is currently seeking the arbitral and consultation provisions, and the threshold for the ratchet up, is that it does not trust us—and one of the reasons for that is the internal market Bill and its illegality.

Lord True Portrait Lord True (Con)
- Hansard - - - Excerpts

My Lords, the noble and learned Lord opposite always has a delightful habit of ending his eloquent speeches with a couple of sentences that I find it hard to agree with, and I do not agree with his interpretation there. But I thank those who have contributed to this short debate. I am grateful for the welcome for the Government’s proposal—I do not talk about tails between legs—and that the other parts of Part 5, to which your Lordships objected before, have been accepted. As perceived from this side of the House, that was the correct action.

I need not repeat the essence of this. Clause 43A is required in the Bill because, as the noble and learned Lord, Lord Falconer, said, it is an important part of implementing the protocol. The clause places a duty on the Secretary of State to provide guidance. I welcome the fact that the EU has clarified that subsidies are within the scope of Article 10 only under the conditions that I described—a genuine and direct link to Northern Ireland and a real, foreseeable impact on trade between Northern Ireland and the EU. This addresses the risk of reach-back and must be reflected in the guidance that the Government will provide.

I am also, of course, grateful for the remarks of the noble and learned Lord, Lord Judge. In concluding, I will emphasise, as he did, that this approach is fully in accordance with the United Kingdom’s commitments under the Northern Ireland protocol and international and domestic law.

Motion C agreed.
Moved by
Lord True Portrait Lord True
- Hansard - - - Excerpts

That this House do agree with the Commons in their Amendment 45C.

45C: After Clause 43, insert the following new Clause—


43A Guidance on Article 10 of the Northern Ireland Protocol


(1) The Secretary of State must publish guidance on the practical application of Article 10 of the Northern Ireland Protocol (State aid).


(2) For that purpose Article 10 is to be read in the light of—


(a) any relevant decision or recommendation of the Joint Committee, and


(b) any relevant declaration that is made in the Joint Committee by either party, of which the other party takes note.


(3) The guidance must be published before the end of the period of one month beginning with the day on which this section comes into force.


(4) A person with public functions relating to the implementation of Article 10 (including functions involving the provision of financial assistance or other subsidies) must have regard to the guidance when exercising such functions.


(5) The Secretary of State may—


(a) revise or replace the guidance;


(b) if satisfied it is no longer necessary, withdraw the guidance.


(6) In this section “Joint Committee” means the committee established by Article 164(1) of the EU withdrawal agreement.”

Motion D agreed.
Moved by
Lord True Portrait Lord True
- Hansard - - - Excerpts

That this House do agree with the Commons in their Amendment 47C.

47C: Clause 43, page 35, line 3, leave out paragraph (b)

Motion E agreed.
--- Later in debate ---
Moved by
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

That this House do not insist on its Amendment 50C to which the Commons have disagreed for their Reason 50D.

50D: Because, while the Commons agree to Lords Amendment 50B, it is not appropriate to link the operation of the reservation proposed by Clause 50 to Common Frameworks.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, I turn once again to the thorny issue of subsidy control. I will begin by addressing Amendment 50E from the noble Baroness, Lady Finlay, before moving on to Amendment 50F from the noble Baroness, Lady Bowles.

I start by saying how pleased I am that we have reached agreement in both Houses on the necessity of Clause 50, which is, of course, the reservation of subsidy control. I welcome the agreement that we should continue the UK-wide approach, which this reservation now confirms in law. However, despite both Houses agreeing to the principle of the reservation of subsidy control, concerns remain about the process for reaching an agreement with the devolved Administrations on designing our future approach.

We recognise the importance of working constructively and co-operatively to design a unified approach that meets the needs of the UK economy. Both Houses supported the Government’s amendment to create a specific duty to consult the devolved Administrations on any response to the forthcoming public consultation. This will bolster the ongoing engagement that already exists between the Government and the devolved Administrations, and it ensures that, at the critical decision point for our future regime, the devolved Administrations will have advance sight of, and the opportunity to comment on, the Government’s conclusions.

The amendment proposed by the noble Baroness, Lady Finlay, would provide a different process for working, through the common frameworks programme. This amendment, like the Government’s amendment that both Houses have now approved, concerns the period between now and a decision on the design of our future subsidy control approach.

The noble Baroness’s amendment reflects the recent proposals put forward by the Scottish and Welsh Governments. While we are grateful for their constructive engagement on this issue, the Government do not believe that this approach is suitable. I emphasise once again that state aid has never been included in the common frameworks programme. The common frameworks programme was designed to operate in policy areas where regulatory powers previously held at EU level intersect with devolved competence.

As I have said many times to your Lordships’ House, state aid has always been reserved. The devolved Administrations have never previously been able to set their own subsidy control rules. This was covered of course by the EU state aid framework. Therefore, the approach proposed in this amendment would, in our view, not be appropriate. Indeed, by accepting the reservation clause both Houses have confirmed the position that subsidy control should not be devolved. Therefore, it is not eligible for inclusion in the common frameworks programme.

The practical effect of the amendment would be to delay the agreement and implementation of any new UK-wide approach. Such a delay, with the unacceptable uncertainty it would create for business on our future approach, would come at a time when the Government are focused on supporting the UK’s economic recovery.

In the previous debate, the noble and learned Lord, Lord Thomas, queried whether this reservation would cut across part III of Schedule 5 to the Scotland Act. I reassure noble Lords that the purpose of this reservation is not to affect devolved competence on other issues, but to allow for the provision of a single national subsidy control regime.

As I have said previously, there has sometimes been a misplaced conflation between the devolved spending powers and the overall system that regulates the potentially harmful and distortive effects of this spending. It is important to note that these are two distinct and separate responsibilities. All UK public authorities are and will remain responsible for their own spending decisions on subsidies, for how much, to whom and for what, within any subsidy control regime. I hope that noble Lords agree that the Government’s Amendment 51B to consult the devolved Administrations is the best way to ensure that we reach a collective and timely agreement on the future of the UK’s approach to subsidy control.

I turn now to Amendment 50F from the noble Baroness, Lady Bowles, which seems to try to determine particular aspects of the UK’s future approach. By pre-empting the outcomes of the forthcoming consultation, the amendment would limit Parliament’s ability to legislate on subsidy control in future. The effect of the amendment would be that the Secretary of State could not make changes to the tests for a harmful subsidy, for remedies, for the scope of exceptions and for the conditions or time limits associated with such subsidies.

It is important to note that most of the elements referenced in this amendment are aspects of the state aid rules. As the noble Baroness will know from her participation in the recent SI debate on this matter, the current state aid rules will not apply to the UK from 1 January. The State Aid (Revocations and Amendments) (EU Exit) Regulations, which were passed in both Houses, provide absolute legal certainty on this point, so it is unclear what the noble Baroness is trying to achieve in trying to prevent the Secretary of State making changes. Most of the elements referenced will not exist in UK law from 1 January, apart from in a more limited way under aspects of the Northern Ireland protocol. “Approvals”, for example, is a concept that does not exist under WTO rules, which the UK will continue to follow from 1 January.

As such, and as I hope noble Lords will understand, I cannot support the amendment. It would be inappropriate to determine particular aspects of the UK’s future approach or to seek to limit the Secretary of State’s ability to design those aspects at this stage. Through the forthcoming consultation, the Government will develop the details of any future domestic subsidy control regime, including the appropriate definitions and mechanisms for oversight. Should the Government then decide to legislate, these proposals will of course be brought before this House and the other place. I reiterate that the purpose of this reservation is to ensure that any future legislation is a matter for the UK Parliament to determine, and that if any legislative regime is introduced, following the agreement of both Houses, it would apply to the whole of the United Kingdom.

For all the reasons I have set out, I cannot accept Amendment 50F from the noble Baroness, Lady Bowles. Moreover, I cannot accept Amendment 50E from the noble Baroness, Lady Finlay, as it is not appropriate to link the operation of the reservation proposed by Clause 50 to common frameworks, and as we have addressed the concerns in Amendment 51B. As such, with this explanation, I hope that the noble Baronesses will not press their amendments.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
- Hansard - - - Excerpts

My Lords, I agree with others who have spoken that this has been an interesting debate. It is clear that good discussions have taken place between Ministers and the movers of the amendments, which is a good sign and reflects changes.

The Government have made a concession and a commitment to extensive consultation prior to bringing forward proposals for their state aid regime. That is a major change compared to where we were at the start of this Bill, which we welcome.

Like the noble and learned Lord, Lord Thomas, we agree that control of state aid and the regime which underpins it must lie at the UK level, but, as we discussed when debating a recent regret amendment to the statutory instrument referred to by the Minister, we think that policy development in this area has been quite bizarre. How on earth Parliament is expected to opine on state aid rules without first knowing what those state aid rules might be—whether we are continuing where we were, whether we are changing to WTO or whether it is somewhere in between—is beyond me; it is not the way we normally do things, as we made clear in that debate. I imagine, and it has been said by others, that it is because this issue is still at the heart of the never-ending discussions in Brussels about the future of the EU free trade agreement. We may begin to see progress once that is resolved, but we are where we are, and we are moving to World Trade Organization rules—much discredited—on 1 January and have yet to consult on an appropriate state aid regime. This is not the way we should do things.

However, we on this side of the House accept that Ministers have given assurances at the Dispatch Box, and they have been repeated today, that spending on state aid, as opposed to the control of policy on it, is an issue that has to respect the devolution settlement. It needs to be done in a way which brings forward the consultation and the seeking of consent that have been discussed by just about everybody who has spoken today. However, a final assurance from the Dispatch Box is required to take the trick on this matter. If the Government repeat that they will make every effort to work consultatively and seek the consent of the devolved Administrations, I do not think that this is right amendment on which to divide the House on this issue or the right time to do it, so we would not support that.

The noble Baroness, Lady Bowles, on the other hand, is moving ahead of the game, looking to future changes and asking how they would be introduced. She is right that these are big decisions that need to be thought through very carefully. If they are to be slipped through in some form of secondary legislation, they will not achieve the scrutiny and debate that they should. She makes some good points about that, and about the gap that will emerge if there is no primary legislation, let alone the need for consultation and discussion with those who have to implement the legislation once it is brought in. Although I discussed it with the noble Baroness prior to this evening’s debate, I suspect that this amendment has been picked up too late to be included in the Bill at this time. As she said, however, it would be good to hear the Minister set out his plans at the Dispatch Box. Again, if he does so, I would not be prepared to divide the House on this issue.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

My Lords, I have once again listened carefully to the points made in the debate today. It is always particularly entertaining to listen to the noble Lord, Lord Adonis, who has once again benefited us with his Brexit prejudices. I give some advice to the noble Lord: he just needs to accept that we had a referendum on this subject as well as a general election that was mainly devoted to it. He really needs to use his considerable talents in other areas and get on with his life. The issue is settled; we are leaving the European Union. I respect his ideas and opinions, but he lost. As a Conservative from the north-east, I know when I have lost an election, and there have been plenty of them in the past.

Regarding devolution, in my previous job I chaired the Joint Ministerial Committee with the devolved Administrations on ongoing EU business. I attended many meetings with both Scottish and Welsh Ministers. Of course, we did not always agree on the outcomes or the issues, but we certainly had a very good personal relationship. I listened to their concerns very closely, as indeed they listened to mine; as I said, we had a good working relationship.

I reiterate, first, that I welcome the shared consensus in this House to continuing the UK-wide approach to subsidy control and confirming this in law. While I am grateful for the time and the effort that has been devoted to scrutinising this provision as is right for your Lordships’ House—perhaps too much time and effort, but we are where we are—it is important to note that we have asked the other place, the elected Chamber, to think again on the relationship between subsidy control and common frameworks. It has been clear that subsidy control does not fall within the common frameworks programme, and that any undue delay is not something to be supported. I hope that noble Lords will be able to respect that decision. I recognise the concerns of the Welsh and Scottish Governments, but I reiterate that the noble Baroness’s amendment is not the best way forward. This amendment is inconsistent with the reservation clauses that both Houses have now agreed should remain in the Bill.

I also reiterate that state aid has always been reserved and, as such, has never been part of the common frameworks programme. This amendment seeks to reverse a decision which has already been made. We need to move forward on this issue as I have indicated, and this will be done through the forthcoming consultation.

The noble Baroness, Lady Finlay, asked me for an assurance that we will make every effort to get devolved Administrations’ support. Amendment 51B demonstrates that the Government are committed to maintaining a constructive, collaborative relationship with the devolved Administrations, as it is in all our interests to ensure that a new regime works for the whole of the United Kingdom. We hope that this amendment will enable us to discuss and resolve any such issues before the publication of any consultation response, and we will commit to listen very carefully to the devolved Administrations’ concerns.

We all agree that the UK Government and devolved Administrations should work constructively and co- operatively in this policy area. That is why, as I have said, the UK Government have set out an amendment that commits to consulting them. The amendment ensures that, before publishing any relevant report relating to the outcome of the UK subsidy control consultation, the Secretary of State will provide a draft of the proposed response to the devolved Administrations, inviting them to make representations. The Secretary of State will then consider any representations and determine whether to alter the report in light of that consideration. If after all that we decide to legislate, it will, of course, come to this House.

This process will ensure that the devolved Administrations’ voices are heard, but it avoids creating the unnecessary delays and confusion that a legislative requirement to try to agree a common framework would introduce. Potentially waiting 18 months for a UK-wide system to be agreed would create uncertainty for UK businesses and damage our efforts to promote the UK’s economic recovery. For these reasons, I respectfully suggest that the approach put forward in the amendment from the noble Baroness, Lady Finlay, is not appropriate at this time.

--- Later in debate ---
18:34

Division 3

Ayes: 142


Liberal Democrat: 80
Crossbench: 42
Labour: 7
Independent: 7
Green Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 241


Conservative: 199
Crossbench: 24
Independent: 11
Democratic Unionist Party: 5
Liberal Democrat: 1

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Consideration of Commons amendments
Tuesday 15th December 2020

(3 years, 3 months ago)

Lords Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 159-I Marshalled list for consideration of Commons reason - (15 Dec 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Moved by
Lord Callanan Portrait Lord Callanan
- Hansard - - - Excerpts

That this House do not insist on its Amendments 1F, 1G, 1H, 1J, 1K, 1L and 8M to which the Commons have disagreed for their Reason 8N, but do propose the following amendments in lieu—

Commons reason

8N: Because the Lords Amendments would be detrimental to the clarity, simplicity and certainty of the United Kingdom internal market regime to be established by the Bill.
--- Later in debate ---
8U: Page 24, line 16, at end insert—
““common framework agreements” has the meaning given by section 10;”.
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - - - Excerpts

My Lords, I turn now to government Amendments 8P through to 8U regarding common frameworks. During many weeks—it seems like it anyway—of thoughtful and robust scrutiny, it is the discussions of the common frameworks programme that have at times proven the most thorough and considered. I pay tribute to and thank colleagues on all sides of the House, on the Opposition Benches, and from all sections, for the positive and collaborative tone with which they have approached discussions on this matter. I pay particular tribute to the noble Lords, Lord Stevenson of Balmacara, Lord Fox and Lord Purvis, and to the noble Baroness, Lady Hayter, who have probably spent more time with me than they would have liked in the run-up to Christmas. I thank them for their engagement.

I also give particular thanks to the noble and learned Lord, Lord Hope of Craighead, who has worked so warmly and collaboratively with the Government, and in a wonderful spirit, to try to find common ground. His contributions to each debate, as always in this House, have been hugely constructive and I want to record my gratitude to him.

We have heard praise from every corner of your Lordships’ House for the common frameworks programme and I put it on record again that I concur entirely with this praise, and reiterate once more this Government’s commitment to the common frameworks. The Government have been clear that the market access principles will work in tandem with the common frameworks. We have been asked to provide as much clarity as possible, and to state our continuing commitment to the programme, and we have thought long and hard about this over recent weeks.

As I have previously said to your Lordships’ House, it is key that we respect the flexibility of common frameworks, that we pay close attention to the interests of other parties involved in the common frameworks programme, and that we protect the voluntary and consensus-driven nature of the programme. These aspects are key to the effectiveness of these processes.

The Government have listened carefully and reflected on the points put forward many times by your Lordships’ House on putting common frameworks in the Bill, and I am pleased to say that today we are able to act. Given the strength of feeling on this matter, we would like to demonstrate our commitment to the programme, first, as requested by many noble Lords, by placing common frameworks in the Bill. Secondly, we are clarifying a relationship that we see between agreements made under the common frameworks processes and the internal market principles established by this Bill.

Specifically, we want to put it beyond doubt that the delegated powers under Clauses 10 and 17 may be utilised to, among other things, make provision to reflect common framework agreements. This can be achieved by excluding specific divergence agreed through the common frameworks process from the operation of the market access principles where all parties to the common framework are in agreement.

We believe that these amendments meet the objectives I have set out. They put beyond any doubt the Government’s commitment to the programme while respecting the voluntary nature of the common frameworks programme. They also make it clear that divergence may occur where there is agreement under a common framework, and that such divergence could be excluded from the market access principles. Regulations to give effect to such an agreement can be made under Clauses 10 and 17. In those cases, the Secretary of State would be able to bring to the House a statutory instrument to exclude from the market access principles a specific agreed area of divergence. This would follow consensus being reached between the UK Government and all the relevant parties that this is appropriate in respect of any specific defined topic within a common framework.

It is worth being clear that the regulation of professional qualifications is very different from that of goods and services. Unlike Parts 1 and 2, there is no power for the Secretary of State to amend the exclusions in Part 3. Although the amendment cannot apply in the same way to this part of the Bill, as your Lordships will be aware, Part 3 contains provisions for an alternative system. This will allow relevant authorities to retain control over professional standards and access to their professions.

For Parts 1 and 2, previous amendments have provided for consent to be sought from the devolved Administrations. Thereafter MPs and Peers from all parts of the United Kingdom would be able to debate and, if appropriate, agree to the change. We do not currently expect that such cases will arise very frequently, but we want to be clear that appropriate means are in place to respect them when they do. In our view, this is an appropriate way to ensure that the market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market while respecting limited divergence agreed under the common frameworks programme.

There has, of course, been significant debate in both Houses regarding the relationship between the common frameworks programme and the market access principles in the Bill, and the impact one has on the other. It is nevertheless important that such examples can be identified and that these matters are reported on rigorously, independently and transparently. In line with other government amendments to enhance the overall transparency of the UKIM Bill and the role of the office for the internal market, Amendment 8T demonstrates our commitment to transparency and evidence building regarding the interaction between the market access principles and the common frameworks programme. Therefore, as part of the OIM’s five-yearly review into the effectiveness of Parts 1 to 3 of the Bill in supporting a healthy internal market, the OIM will now also address how Parts 1 to 3 have affected the operation of agreements under common frameworks, including the effect that those agreements have had on the operation of the UK internal market.

We are confident that the amendments provide an appropriate way to ensure that the market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market. They do this while allowing for a degree of agreed divergence, reflecting different circumstances in particular parts of our United Kingdom. As noble Lords would expect, our partners in the devolved Administrations have been updated on this approach.

These amendments are the product of many weeks of robust and constructive debate. As I said, I thank all noble Lords from both the opposition Front Benches who have been involved in the debate. The amendments reflect the Government’s steadfast commitment to the common frameworks programme, to enhancing the overall transparency of the Bill and to making clear the Secretary of State’s power to exclude areas of divergence agreed under common frameworks. I beg to move.

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Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
- Hansard - - - Excerpts

I also welcome the Motion moved by the noble Lord, Lord Callanan.

We are delighted that the Government have responded to the repeated and really quite strongly supported urgings from this House to hardwire, if you like, the common frameworks process into the Bill. After all, as we have heard, the Bill was introduced to deal with powers returning from the EU—powers that are devolved but might need to be used in ways that would not interfere with the development of our own UK single market.

Indeed, it was for that reason that the common frameworks process was established in 2017. The Government are about to write into the Bill—in a few moments’ time, when we will vote for it—that, in cases where a particular divergence in a market area is agreed under the common framework, such an agreement can be exempted from the market access principles. This recognises in law that uniformity is not always necessary in an internal market, allowing some divergence and differences to suit the particular circumstances of parts of our union.

Furthermore, as has been said, a review will take place to judge how that interplay between the framework and the market access principles is working in this new internal market. We hope that this review will show that a consensual approach to these issues works well with the wider aim of achieving a successful internal market. However, as the noble Lord, Lord Fox, said, it will also be interesting to see whether the review looks at how this works with the CMA and the OIM. We all have a lot to learn on this.

The Motion means that the frameworks are included in the Bill, which was lacking at the beginning. I thank Ministers for finding a route forward. I think they sometimes have to break more arms on their side than on ours—though they would know more about that than we do. We join them tonight in confirming the recognition of the devolved settlements and our wish to strengthen both devolution and the future of the union. We see those two aims as entirely compatible and I think they do too.

As we close this chapter of our adjustment to the post-Brexit situation, we also thank the Ministers for their other amendments, to ensure that the OIM appointments and most regulations are agreed with the devolved authorities. I think the Minister had a hand in the recognition of my particular pet project of recognising the importance of the internal market working for computers—sorry, consumers; too much time on Zoom. I do thank him personally; I know he had more than a little hand in that.

I thank all concerned. The Bill team have worked wonders. All those who have voted have enabled us to push on this. I thank the magnificent Lords clerks who have worked against the clock and conflicting interests to get this done, our colleague Dan Harris, my noble and learned friend Lord Falconer and my noble friend Lord Stevenson, who has led us on the Bill so well. I also thank our very special Leader, who gets us all here, my noble friend Lady Smith of Basildon. For the moment, let us put this Bill to bed.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - - - Excerpts

There is a new “computers for consumers” skill that we also need to get passed in a future amendment. As the debate draws to a close, I am once again enormously grateful to those who have contributed to the discussion. These debates have been noteworthy for the breadth of ground covered and the depth of expertise on display. Everyone has acted in the finest traditions of your Lordships’ House. I would like to put on record my thanks for the contributions of colleagues on all sides of the House.

Today’s debate and amendments are the product of intense engagement, often to very tight timescales. I have already thanked colleagues who were involved in long team Zoom calls at different times, but the noble and learned Lord, Lord Hope, deserves all the praise that has rightly gone his way. I also add to the thanks from the noble Lord, Lord Fox, and the noble Baroness, Lady Hayter, to the Bill team. I thank the Bill manager, Shreena Kotecha, and Jayne McCann, Satchi Mahendran, Jefferson Yen, Dominic Entwistle, Katrina Gajewska, Bridget Micklem, Greg Dyke, Amy Smith, Dominic Bull and all their colleagues. I thank Martynas Zekas in my office, who has done such a fantastic job. They have all worked many long hours, late into the evening and at weekends, in difficult circumstances and often from home. They have all acted in the finest traditions of the Civil Service and we should put our thanks to them on the record. I also express my thanks to my ministerial colleagues—my noble friends Lord True, Lady Bloomfield, Lady Scott and Lady Penn. They have made invaluable contributions and helped to get this measure on the statute book. Thank you very much to all of them.

Throughout these debates, the enthusiasm for the common frameworks programme has been heartening. While discussions have been robust, as always, it is encouraging to hear unanimous support for the programme, which is a cornerstone of mutual co-operation between the Government and devolved Administrations. These amendments are the result of these discussions and underline the Government’s commitment to the programme. They make clear in the Bill the relationship between common frameworks and market access principles. I hope noble Lords will agree to support the Motion. I say to the noble Lord, Lord Fox, that some amendments go back to bring common frameworks into the Bill. I hope noble Lords will agree that this represents a positive conclusion to the work of your Lordships’ House on this Bill.

Motion A agreed.

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Consideration of Lords amendments
Tuesday 15th December 2020

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Commons Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: HL Bill 159-I Marshalled list for consideration of Commons reason - (15 Dec 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Paul Scully Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
- Hansard - - - Excerpts

I beg to move,

That this House disagrees with Lords amendments 1F, 1G, 1H, 1K, 1L and 8M.

I am pleased that we continue to make positive progress on the Bill and that both Houses have continued to find agreement on a number of issues. In large part, this is due to colleagues from across both Houses continuing to have constructive and positive discussions with the Government. I want to put on record my thanks to colleagues on the Opposition Benches in this place, and the other place, in particular, for their engagement.

There are still a few outstanding areas, which have gone back and forth between the Houses, and I will outline the Government’s rationale for why we cannot accept the proposals as drafted. I will begin by speaking about the approach to exclusions taken by the Bill, which is a shared point across amendments 1F, 1G, 1H, 1J, 1K, 1L and 8M. I will then address the specifics of the common frameworks amendments and wider market access exclusions.

As I said last week, and as my noble friends Lord Callanan and Lord True said in the other place yesterday, the Government have been clear throughout these debates that we agree that there is a need for an exclusions regime. However, it has to be carefully drafted and provide certainty for business. In drafting the Bill, and clauses 10 and 17 specifically, the Government have designed an exclusions approach that achieves a careful balance. Both the noble and learned Lord Hope and Lord Stevenson have narrowed the scope of their amendments and I thank them both for their continued dialogue with the Government on those. Our assessment remains, however, that the approach in both sets of amendments goes too far both in the breadth of exclusions that it would require the Secretary of State to create and the uncertainty that it would lead to. These amendments would be detrimental to the clarity, simplicity and certainty that the Bill intends to provide.

Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
- Hansard - - - Excerpts

My reading of these amendments is that they are extremely watered down from what we would want. They essentially still give the Westminster Government a veto over the ability of the devolved Governments to legislate within devolved competency, so these are very meagre proposals. In refusing to accept even these proposals, is not the true nature of the Bill revealing itself? It is the British Government’s intention to use the Bill to impose uniformity over Wales and Scotland.

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Paul Scully Portrait Paul Scully
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The purpose of the Bill has been from the start and remains to give businesses certainty as we leave the transition phase—to have one single internal market.

Alan Brown Portrait Alan Brown (Kilmarnock and Loudoun) (SNP)
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The Minister spoke about certainty for business. Can he give an example of something that he thinks would fall in these exclusions that would cause widespread panic in businesses in the UK?

Paul Scully Portrait Paul Scully
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The hon. Gentleman needs to speak to Scottish businesses more to see that they are concerned. They want to have the Bill in place to have the certainty, with 17 days to go until the end of the transition phase.

It is important to reiterate that the common frameworks are processes, not outcomes, and therefore broad exclusions are not suitable in this legislation. That leads me to amendments 1F, 1G, 1H, 1J, 1K and 1L. The common frameworks programme facilitates a conversation about a common approach and thus provides for consensus-based decision making in sectoral areas of the economy. However, it is neither the purpose nor in the purview of common frameworks to determine whether matters should or should not be in the scope of the market access principles. It is only right that the UK Parliament and parliamentarians from across the UK have the final say on this matter.

The Government also believe that the system that they have designed creates a proper balance between the independent operation of devolved powers and the automatic application of the principles that protect the market and give certainty.

William Cash Portrait Sir William Cash (Stone) (Con)
- Hansard - - - Excerpts

My hon. Friend has quite properly said that it is a matter for Parliament to make these judgments. As Chair of the European Scrutiny Committee, I had hoped that the Chancellor of the Duchy of Lancaster would come before my Committee. The Standing Orders quite clearly give us the right to examine questions relating to matters that are politically or legally important, and to report to Parliament accordingly. The problem that we have is that he has declined to do so three times in response to our written requests, and now this morning I have heard that he is not going to appear before the Committee. Would the Minister be kind enough to take that back where it belongs?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I am sure that my right hon. Friend the Chancellor of the Duchy of Lancaster will have heard the message from the Chair of the Committee and his clear steer. It has been said many times in this House and in the other place, but it is worth stating again the Government’s commitment to the common frameworks programme. We attach enormous value to the forums that they provide for collaborative working with the devolved Administrations.

Pete Wishart Portrait Pete Wishart (Perth and North Perthshire) (SNP)
- Hansard - - - Excerpts

The Minister talks about consensus and involving the devolved Administrations. This is the opposite of consensus and agreement; it is imposition and constraint. These Lords amendments were his last chance to get this right. He has failed to do so. Will he now impose his will on the devolved Assemblies of the United Kingdom and force this Bill through the House?

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Paul Scully Portrait Paul Scully
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I am glad that the hon. Gentleman thinks that I can force my will through both this House and the other place. What we have done throughout is to seek to collaborate. We continue to seek to collaborate on both the common frameworks and the internal market as we move forward. I hope that the Scottish Government will come with us on that journey, but the common frameworks process is just that—a process for agreeing and managing policy divergence in a variety of specific policy areas. As such, the programme is primarily concerned with ways of working, rather than determining policy outcomes.

The common frameworks programme will put in place durable arrangements for the intergovernmental working between the Government and the devolved Administrations in the policy areas covered by individual common frameworks. Those clearly defined ways of working will lend themselves to the common frameworks programme, and the individual common frameworks of which it is comprised are being considered as part of the business as usual discussions that will take place in our future intergovernmental relations infrastructure, and will benefit accordingly. Our intention is that these mechanisms for sector-specific co-operation will allow for coherent policy making between the UK Government and the devolved Administrations in those policy areas. I therefore ask the House to disagree with amendments 1F, 1G, 1H, 1J, 1K and 1L, and to vote instead to provide certainty for businesses.

Amendment 8M would cut across the Government’s objectives, and leave businesses exposed to new burdens and barriers. Despite a reduced list of aims, very broad areas of public policy could be excluded from the market access principles. Alongside the problems posed by the areas suggested for exclusion, there is a more fundamental issue with the approach taken. To be excluded under the approach proposed in the amendment, a requirement must only “make a contribution to” the achievement of one of the aims from the list, meaning that a policy need only have a tangential relationship to a social policy objective to be taken out of scope. The amendment would also lead to uncertainty as to when the market access principles apply, not least by a very unusual use of the term “proportionate”. It would fall to the courts to determine the relative extent to which different policies meet one of the aims, with no consideration of the burdens introduced. This will not deliver the certainty that business needs.

In addition, I want to stress one point that I feel has sometimes been overlooked. Market access principles do not prevent the devolved Administrations from introducing innovative policies designed to meet their own goals and objectives, including those relating to the environment and public health. They can do so in the context of mutual recognition, which is necessary to protect the free flow of goods around the UK. Without this, we would see a decrease in consumer choice, increased prices and additional costs for businesses. I do not believe that anyone in either House would support such an outcome, nor is it in the interests of business or our constituents. I have constantly heard claims in this House and the other place that the Bill would prevent charges on single-use plastics in Wales, for example. That is categorically not true, as the Government have repeatedly made clear across both Houses.

Manner of sales policies, which have typically been the most innovative types of policies, will not be impacted by the market access principles, as long as they do not discriminate and are not designed artificially to circumvent mutual recognition. This covers innovative policies such as plastic bag charging and minimum unit alcohol pricing. The Bill is also clear that the devolved Administrations would no longer need to notify and justify new measures to the EU Commission when they want to innovate and try new policies. What they will not be able to do is erect harmful and unwanted trade barriers between other parts of the UK. I therefore call on the House to support the Government and disagree with amendment 8M.

I end by saying that the other place, as is their right as a revising Chamber, asked the Government and the House to reflect on their approach. The Government have carefully considered the arguments put forward by hon. Members, right hon. Members and Lords across both Houses, and we have come to agreement on reasonable proposals in some areas. However, the Government cannot agree to these amendments as they stand.

I appreciate the constructive approach that peers in the other place have taken in discussions with Government, and we will continue to engage and find common ground. However, I am afraid that these amendments as drafted still do not provide the certainty that businesses need. I therefore call upon the House to support the Government and provide the clarity that our businesses need and, ultimately, preserve the UK internal market, which has been the engine of growth and prosperity for centuries.

Lucy Powell Portrait Lucy Powell (Manchester Central) (Lab/Co-op)
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I rise to uphold the Lords amendments that we are discussing today. It is a pleasure to be back at the Dispatch Box, given that I have been cooped up at home self-isolating, having been pinged. I was not pinged as part of this ping-pong though; I was in fact pinged by the coronavirus app, so I was not here last week. I put on record my thanks to my boss, my right hon. Friend the Member for Doncaster North (Edward Miliband), who deputised for me on these occasions last week—and did so incredibly well, I hasten to add.

As ever, my right hon. Friend made a strong case against the Government’s United Kingdom Internal Market Bill, which has been poorly drafted from the outset. Without the Lords amendments we are debating today, the Bill poses a real threat to the future of our United Kingdom. Even though I was not here last week, it does feel a bit like we have been in suspended animation with this Bill. I appreciate there have been welcome changes in the meantime as a result of the Government dropping part 5, but it still, I am afraid, feels a bit like groundhog day. Here we are, yet again asking where the oven-ready deal is for Brexit. We are still asking the same questions on market access principles. We are still seeking the same recognition in the Bill of the devolution settlement through the common frameworks process. As with every other groundhog day where we have been debating this Bill, we will soon be hearing from the hon. Member for Stone (Sir William Cash).

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David Linden Portrait David Linden (Glasgow East) (SNP)
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It is an honour to follow my constituency neighbour, my hon. Friend the Member for Glasgow Central (Alison Thewliss). Like other hon. Members on the SNP Benches, I welcome the amendments from their lordships to try to protect the devolved settlements from policy divergence across the UK. However, it strikes me as a rather bizarre state of affairs that we are desperately relying on the unelected and democratically illegitimate House of Lords to defend devolution and democracy. That irony is not lost on me, but I will return to that just a little bit later.

I rise today to speak in favour of Lord Hope of Craighead’s amendment on the common framework; I remain enormously frustrated that the Government are opposing it in this House in order to protect their grubby power grab on the devolved legislatures. Of course, that should not come as a surprise to the House: not only did this British Tory Government campaign against devolution in 1997, but they actively loathe it even now, and make no attempt to hide that view.

We have a Prime Minister who told his Back Benchers that devolution was “a disaster” and that devolving power was Tony Blair’s “biggest mistake”, which will certainly come as a surprise to those of us who opposed the war in Iraq. However, it is not just the Prime Minister who holds that anti-devolution view; it runs all the way through this Bill. The Leader of the House and Lord President of the Council is also on record as saying that,

“constitutional tinkering has weakened our Parliament and has helped to divide the United Kingdom”—[Official Report, 26 November 2020; Vol. 684, c. 989.].

I would argue that the Government do not need much help with that, frankly.

We are where we are, and that is why I support the amendment to the Bill made by Lord Hope. We should not be surprised by the Tories’ anti-devolution rhetoric, but I must say I was surprised and disappointed to see the British Labour party withdraw its support for Lord Thomas’s amendment, which challenged clauses on direct spending in devolved areas. Perhaps it is a sign of just how out of touch the Labour party has become that Lord Stevenson, speaking for his party in the Lords last night, said that,

“the points made by the Minister on the shared prosperity fund were sufficient to ensure that we do not need to go back over this again. It is not our view, as Her Majesty’s loyal Opposition, that we need to divide the House on this issue again.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1476.]

It is hard—really hard—to imagine a giant such as Donald Dewar, for example, uttering those words in Westminster, but they reaffirm my belief that this place and its two biggest parties cannot be trusted to protect our devolved institutions. Perhaps that is why, yesterday, we saw the 16th poll in a row showing majority support for Scottish independence. Alongside my colleagues this afternoon, I will vote for the amendments, but the only way to truly empower the Scottish Parliament is with independence, not with Lords amendments. Scottish independence is only a case of when, not if, and I suspect the Minister knows that too.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I am grateful for the forbearance of colleagues who have brought this debate to a relatively short end. I will not detain them for too long; I just want to thank everybody who has spoken today.

It is a shame that a number of the speeches veered from the amendments that we are considering today, but it was somewhat predictable. We are debating devolution, but in reality a number of hon. Members talked about independence, without using the word—I think in SNP bingo the word independence came up only once. The sentiment was that they are using this Bill to further their ambitions for independence, rather than concentrating on respecting the devolved Administrations through devolution and common frameworks.

We have before us today’s amendments, which the Lords considered and voted on, yet much of the debate was about yesterday’s amendments and an attack on the Labour party. I appreciate the opening words from the hon. Member for Manchester Central (Lucy Powell), that it is important that we keep on talking to get this important Bill through, so that we can give businesses certainty.

David Linden Portrait David Linden
- Hansard - - - Excerpts

I do not want to intervene on this love-in of the Better Together alliance, but the Minister spoke earlier about using the United Kingdom Internal Market Bill to divide the United Kingdom. Actually, opinion polling has shown a clear trajectory in terms of Scottish independence—16 polls in a row. Why does he think that is?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I am not sure which amendment the hon. Gentleman is speaking to, but I note that the last poll was 52:48, which I am sure he will talk about; it seems to be a figure that keeps coming up.

Why do we need to give businesses certainty? This is not just about Northern Ireland, Wales and England; it is about Scottish business too. Some 60% of Scotland’s trade—more than £50 billion—is with the rest of the UK. Up to half a million jobs are dependent on that internal trade.

Drew Hendry Portrait Drew Hendry
- Hansard - - - Excerpts

On that statistic about Scotland’s exports, will the Minister concede that 62% of manufactured exports from Scotland go outwith the UK, to the EU and the rest of the world?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

That refers to the 144,000 jobs, as I am sure the hon. Gentleman would say, which were considered by the same institute that came up with the half a million jobs dependent on internal trade. He talks about the manufacturing trade; that is why we are better together as a United Kingdom. We have the whole gamut of skills, whether it is in manufacturing, services, culture, financial services or legal services—all those areas that we can provide as the UK which will make us a force to be reckoned with as we come out as one global Britain, with the opportunities that we will afford ourselves, in 17 days’ time.

Liz Saville Roberts Portrait Liz Saville Roberts
- Hansard - - - Excerpts

Will the Minister give way?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I will not, because I need to bring my remarks to a close.

The Government will continue to be reasonable in discussions on the Bill. We have made great progress so far in both Houses on finding areas of agreement—on what brings us together as one UK as we look to leave. I appreciate the constructive approach that peers in the other place have taken in discussions with the Government. We will continue to engage and to find that common ground, but we assess at the moment that the amendments proposed by the other place continue to go too far and run counter to the certainty that the Bill provides and that businesses need.

As we have made clear before, this Bill is vital in preserving our internal market and continuing to provide certainty for businesses as we seek to recover from covid-19, prepare for the opportunities after the transition period and protect jobs. I therefore call on the House to support the Government’s motion.

Question put, That this House disagrees with Lords amendments 1F, 1G, 1H, 1K, 1L and 8M.

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15:07

Division 187

Ayes: 362


Conservative: 354
Democratic Unionist Party: 7
Independent: 1

Noes: 262


Labour: 195
Scottish National Party: 47
Liberal Democrat: 11
Independent: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Resolved,

United Kingdom Internal Market Bill

(Limited Text - Ministerial Extracts only)

Read Full debate
Consideration of Lords amendments
Wednesday 16th December 2020

(3 years, 3 months ago)

Commons Chamber
United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Commons Consideration of Lords Message as at 16 December 2020 - (16 Dec 2020)

This text is a record of ministerial contributions to a debate held as part of the United Kingdom Internal Market Act 2020 passage through Parliament.

In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.

This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here

This information is provided by Parallel Parliament and does not comprise part of the offical record

Paul Scully Portrait The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
- Hansard - - - Excerpts

I beg to move,

That this House agrees with Lords amendments 8P, 8Q, 8R, 8S, 8T and 8U.

I am delighted to be able to come back to the House today with positive news for business and for our constituents. As I have said before, I am immensely grateful to colleagues across both Houses for their constructive discussions with Government, and I would like to extend my thanks to all colleagues in both Houses for working with the Government to reach agreement on how we can best ensure that the frictionless intra-UK trade we enjoy today can continue into the future, especially as we recover together from covid-19. As we have made clear, this Bill is about protecting businesses and livelihoods—real people and real jobs—and I am pleased that both Houses have worked constructively to do that. I want to again extend my thanks to colleagues on the Opposition Benches in this place, and in the other place in particular, for their engagement.

As I set out to the House yesterday, the Government are committed to the common frameworks programme. We attach enormous value to the fora that they provide for collaborative working with the devolved Administrations. The Government have also been clear that the market access principles will work in tandem with common frameworks. We have been asked to provide as much clarity as possible on our continuing commitment to the programme, and we have thought long and hard about this over recent weeks. It is important that we respect the flexibility, and also the commonality, of common frameworks, paying close attention to the interests of all parts of the UK involved in the common frameworks programme and protecting the voluntary and consensus-driven nature of the programme. Indeed, these aspects are key to the effectiveness of the processes. The Government have listened carefully and reflected on the points put forward in both Houses about putting common frameworks on the face of the Bill, and we have now done so through these Lords amendments.

Alan Brown Portrait Alan Brown (Kilmarnock and Loudoun) (SNP)
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Obviously we welcome some sort of concession on common frameworks, but the Minister said yesterday that enshrining common frameworks in the Bill would create uncertainty for business, so what has changed from last night to today?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

What has changed from last night to today is the convivial and constructive discussions we have had to allow for amendments that are worded to the satisfaction of, certainly, the other place and I hope this place, that will allow us to progress with both the common frameworks as a voluntary process and the certainty of the internal market.

Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
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Before the Minister starts launching the fireworks in celebration of the progress in the Lords yesterday, I would like to remind him that the Welsh Government remain deeply dissatisfied and have announced that they intend taking the UK Government to court over the provisions in the Bill, not least the state aid provisions and the economic intervention proposals. Will he explain how the common frameworks process will work and where power will reside within the common frameworks, because there is a degree of ambiguity about that? Will he also commit the British Government to bringing forward a statement on the common frameworks to the House of Commons for scrutiny in the new year so that we can have a discussion about whether this is actually the best way forward?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Clearly it is disappointing that the Welsh Government have chosen to issue that statement, especially in the light of the productive working relationship that we have enjoyed with their Ministers and officials during the passage of the Bill. I know that the common frameworks have been subject to much debate, and I hope I will be able to clarify this as we go through. There will be more discussion in the new year about the frameworks and how they will work moving forward, because they have been productive in a number of areas to date, and I know that that will continue.

Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
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I, too, thank the Minister for what he has brought forward, but I seek clarification, as I often do, on the position of Northern Ireland within the United Kingdom. Will the final decisions on any movement of goods, east-west, north-south, or whatever it may be, lie with the Northern Ireland Assembly or with this place? Also, what discussions has he had with the Northern Ireland Assembly, the First Minister, the Deputy First Minister and the Minister at the Department of Enterprise, Trade and Investment?

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Ironically, not particularly on common frameworks or the United Kingdom Internal Market Bill, although I have taken over from my ministerial colleague, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), in the quad discussions with the devolved Administrations. We had my first one this morning, and I look forward to further conversations. As for what happens to Northern Ireland goods to GB and vice versa, we have had an agreement in the Joint Committee. I look forward to seeing the results of the talks that are continuing in Brussels, because ultimately if there is a pathway to a deal, that will help to smooth the transition process. Ultimately, however, the long-term aim of what happens to the workings of the Northern Ireland protocol will sit with the elected representatives of Northern Ireland, given their vote in a few years’ time.

The Government here are demonstrating their commitment to the programme by, first, placing common frameworks on the face of the Bill, through our amendments yesterday in the other place, and, secondly, clarifying the relationship that we see between agreements made under the common frameworks processes and the internal market principles established by the Bill. Specifically, we are making it clear, through amendments 8P to 8S, that delegated powers under clauses 10 and 17 may be utilised to, among other things, make provision to reflect common framework agreements. In such cases, the Secretary of State would be able to bring to the House a statutory instrument to exclude from market access principles a specific agreed area of divergence. That would follow consensus being reached between the UK Governments and all the relevant parties that that was appropriate, in respect of a specific defined topic within a common framework.

For parts 1 and 2 of the Bill, previous amendments are provided for consent to be sought from the devolved Administrations. If that is not forthcoming within a month, MPs and peers from all parts of the UK would thereafter be able to debate and, if appropriate, agree to the change. We do not currently expect such cases to arise very frequently, but want to be clear that appropriate means are in place to respect them when they do.

The amendments to clauses 10 and 17 are complemented by amendments 8T and 8U. In line with other Government amendments to enhance the overall transparency of the United Kingdom Internal Market Bill and the role of the Office for the Internal Market, these amendments demonstrate our commitment to transparency and evidence building regarding the interaction between the market access principles and the common frameworks programme. As part of the OIM’s five-yearly review into the effectiveness of parts 1 to 3 in supporting a healthy internal market, the OIM will now also address how parts 1 to 3 have affected the operation of agreements under common frameworks, including the effect that those agreements have had on the operation of the internal market. This will ensure proper scrutiny of both regulatory changes and the progress made under common frameworks.

The Government are confident that these amendments provide an appropriate way to ensure that market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market for all British businesses and citizens. They do this while allowing a degree of agreed flexibility, reflecting different circumstances in particular parts of the UK. In reaching agreement on these amendments and thus agreeing on the final outstanding issues of the Bill, both Houses will be protecting and preserving the United Kingdom’s internal market, which has been the bedrock of our shared prosperity for centuries.

Lucy Powell Portrait Lucy Powell (Manchester Central) (Lab/Co-op)
- Hansard - - - Excerpts

Well here we are again—groundhog day. Early on, I dubbed this Bill the infernal market Bill, and it has certainly lived up to that name. It is good to see the hon. Member for Stone (Sir William Cash) in his seat again. I am not sure what he is going to do in a few weeks’ time after all his doughty energies tackling issues around Brexit. I am not sure whose fault it is all going to be in a few weeks’ time. Perhaps Ministers should watch their backs; they might find it is their fault once Brexit can no longer be blamed for all his ills.

Let me start by thanking Ministers and their officials for the discussions that we have had in recent days about how we can make the best of this bad Bill. Let us be honest: when it first saw the light of day, it was clear for all to see what a terrible Bill this was. It was wrong in seeking to break international law, and it was wrong in disrespecting the devolution settlement and failing to understand the way the UK now works through power sharing. That is why we have been so vociferously opposed to it in this House.

We led the way on that, starting, as you will remember, Madam Deputy Speaker, with my right hon. Friend the Member for Doncaster North (Edward Miliband) taking down every single argument of the Prime Minister, who was here himself on Second Reading. Through the Bill’s many stages in this House, we have been clear in our opposition to some of its serious flaws. It has been a long and difficult process.

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Alan Brown Portrait Alan Brown
- Hansard - - - Excerpts

I would like to briefly add to what my colleagues have said. We welcome some sort of recognition of the common frameworks. There is a lot still to be teased out in terms of how that will work. We know that Westminster’s sovereignty will overrule things, and that is still a big concern, but we welcome that measure. I still do not understand how the Minister stood at the Dispatch Box yesterday and said that common frameworks could not be enshrined in the Bill, because it would be so bad and would cause businesses uncertainty, and now he says, “We’ve listened to the Lords, and everything’s okay.” It would be good if he could clarify that when he sums up.

Despite what the hon. Member for Manchester Central (Lucy Powell) said, Labour did not lead the way on this. Labour gave up on devolution, and it gave up in the other place. Labour did not even back my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) in the Reasons Committee. Labour sat on its hands in the vote in that Committee. Lord Stevenson said, “We will not divide the House.” That is giving up. Labour gave up in the Lords.

Let us look at clause 48 and what Labour gave up on. Westminster is now allowed to provide infrastructure at places in the United Kingdom, including infrastructure connected with any of the other purposes mentioned. That infrastructure includes water, which is still publicly owned in Scotland, electricity, gas, telecoms, sewerage—also publicly owned in Scotland—railway facilities and roads or other transport facilities. As the hon. Member for North East Fife (Wendy Chamberlain) said, that paves the way for the glorious Union bridge or Union tunnel that we do not want and do not need, because we can invest better in transport infrastructure ourselves.

There is no doubt that the greatest improvements in Scotland’s infrastructure have come since the introduction of the Scottish Parliament, making decisions for the people of Scotland on behalf of the people of Scotland and representing the people who elected them. [Interruption.] Does the hon. Member for Manchester Central want to intervene? No. As I was saying, the greatest improvements in Scotland’s infrastructure have come since the introduction of the Scottish Parliament. MSPs are answerable to the people who elected them. Unfortunately, we have a right- wing Tory Government who Scotland did not elect, and now they are free to overrule us. Labour backed down. It does not matter what the hon. Member for Manchester Central said; Labour backed down and gave up.

The Bill allows Westminster to spend not only in Scotland but in Wales, overruling the Welsh Labour Government on health, education, culture, sports facilities, court or prison facilities and housing. We are leading the way in building social housing in Scotland. We ended the right to buy. The Tories obviously still think that the right to buy is a good thing, forcing councils to get rid of their housing stock. How dare Westminster legislate to provide housing in Scotland—we have done very well without your help, thank you very much.

State aid is something else that Labour gave up on. It has been stated clearly that state aid was never a reserved function, and therefore it was devolved to the four nations, so why is Westminster taking it back? Does it think that that sends out a good message?

People are watching. Studies in Scotland have shown time and again that people in Scotland trust the Scottish Parliament to legislate and invest in these matters over Westminster, so why Westminster thinks it can do a better job is beyond me. As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey said, it looks like independence is the only way that we can protect the powers of the Scottish Parliament. Bring it on.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

Let me quickly answer a few points. My hon. Friend the Member for Stone (Sir William Cash) asked for a bit more detail on the amendments. In the small number of cases in which the market access principles apply to divergence agreed under a common framework, clauses 10 and 17 could be used to exclude the agreement from the market access principles. The Secretary of State would be able to do so following a consensus agreement that that was appropriate under the common framework. That is the appropriate way to ensure that the market access principles in the Bill can ensure certainty and a seamlessly functioning internal market while still respecting agreed limited divergence under the common frameworks programme.

Originally, Lord Hope’s amendments would have required the Secretary of State to exclude any divergence agreed under the common frameworks process from market access principles; by contrast, the Government’s amendment makes it clear that this is an option open to the Secretary of State, thereby giving the Secretary of State the discretion to ensure that the disapplication of the market access principles would never lead to the emergence of unacceptable trade barriers within the United Kingdom.

The hon. Member for North East Fife (Wendy Chamberlain) talked about the CMA, the OIM and what would happen with international players. The CMA and the OIM have the flexibility to investigate and report on any issues that they choose, but they are not themselves decision makers on market access principles. Throughout the Bill’s passage, we have made sure that both the OIM and the Bill itself will apply rules to each part of the UK—to England, Scotland, Wales and Northern Ireland—equally.

Wendy Chamberlain Portrait Wendy Chamberlain
- Hansard - - - Excerpts

I thank the Minister for his response, but will he accept that, in the letter he wrote to the Scottish Affairs Committee after his appearance before the Committee in relation to the Bill, he was unable definitively to rule out foreign investors being able to take the UK Government to court, whether through the OIM or otherwise?

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Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

In establishing the Office for the Internal Market through this Bill, I wanted to make sure that it was not the Office for the Internal Market itself that it would be able to work through, so that is within the purview of this particular part of the Bill.

The hon. Member for North East Fife talked about about the fact that when we talk about devolution it is not about Committees, and I totally agree: it is about dialogue, consensus and giving business certainty. This is in stark contrast to what we have seen from the Scottish National party, which walked away from discussions about the internal market in 2019. That is no way to build consensus and to have that dialogue. If the SNP and the Scottish Government want to talk about ending the right to buy and to go with that to the council house-owning residents in their electorate, that is up to them. We are not talking about devolved parts of housing; when we talk about spending or any of these other issues, it is complementary to what the Scottish Government, or indeed the Welsh Senedd or the Northern Ireland Assembly, are doing within their devolved rights.

Drew Hendry Portrait Drew Hendry
- Hansard - - - Excerpts

Once again, the Minister has talked about the Scottish Government walking away from the internal market discussions; of course, the internal market discussions led on to this Bill—we knew it was going to be a bad move forward. The Scottish Government engaged constructively, and continue to be willing to do so, in the common frameworks discussions. The Minister should make that clear when he makes that point about the internal market discussions. On the matter of housing, as my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) pointed out, the Government can now interfere in and overrule legislation in Scotland.

Paul Scully Portrait Paul Scully
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No, this is about spreading. I readily accept that the discussions on common frameworks continue, and I very much welcome that. As I say, common frameworks go wider than just trade and the measures covered in the Bill. None the less, to walk away from discussions on the internal market a full year or 18 months before we reached this position is really to walk away from the responsibility to help to shape the discussions, as we have seen in the more fruitful conversations with the Welsh Senedd, including in recent days.

We heard the hon. Member for Edinburgh North and Leith (Deidre Brock) talk about pre-written barbs, but time and again when we have come back to this place it has just been a rehearsal of the arguments not about the devolution settlement or the Bill itself, but about independence. It has been the same debate time and again, instead of Members involving themselves in the detail of the Bill and giving certainty to business.

Alan Brown Portrait Alan Brown
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Will the Minister give way?

Paul Scully Portrait Paul Scully
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I will not give way.

I finish by thanking everyone who spoke in the debate, and by once again thanking all hon. and right hon. Members and noble Lords who have engaged with the Bill over the last few weeks. I thank the Public Bill Office for its support to all Members and officials across Government. I pay tribute to the entire ministerial team across both Houses and all Departments, who have worked jointly to deliver the Bill—in particular, Lord Callanan, Lord True and the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith), and the Minister of State, Northern Ireland Office, my hon. Friend the Member for Worcester (Mr Walker). I also pay tribute to Yasmin Kalhori and the team of the Leader of the House of Lords.

I welcome the contributions and the constructive discussions that we have had in recent days with Opposition Members in both Houses that have got us to this place. We have had some passionate debates on the Bill, because of the importance of the issues. However, the Bill will ensure that UK businesses can trade across the four parts of the UK in a way that helps them to invest and create jobs, just as they have for hundreds of years. I am therefore delighted to ask the House to agree to the amendments, and to complete our scrutiny and consideration of the Bill.

Drew Hendry Portrait Drew Hendry
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This is an outrage to Scotland. It is not acceptable.