Committee (1st Day)
Relevant documents: 14th Report from the EU Select Committee, 24th and 26th Reports from the Delegated Powers Committee, 17th Report from the Constitution Committee
Clause 1: Purpose of Part 1
1: Clause 1, page 1, line 6, after the first “Kingdom” insert “to protect and promote the interest of consumers and safeguard the environment”
My Lords, in moving Amendment 1, I welcome that today we are not starting on Part 5 of the Bill, as there are two other major issues which need to be reformed. Indeed, the Bill’s genesis never involved including Part 5, but concerned how to use repatriated competitive and other regulatory powers post transition. Today we will deal with two of these: first, how to give the new competition regime a consumer focus; and secondly, how to organise returning powers into the devolved structure the UK will operate in 2021, as opposed to the 1973 position when we entered the EU.
Amendment 1 deals with the whole point of market intervention and competition policy: to promote the interest of consumers where, for whatever reason, they are operating in an imperfect market. But it also acknowledges that helping businesses to grow or consumers to benefit must not be at the expense of our precious environment. The amendment would write into Part 1 that its purpose is to benefit consumers and to safeguard the environment.
Anyone who has worked in regulation or in the courts knows that these overarching objectives, or duties, are essential in interpreting or enforcing the specific clauses, resulting legislation or indeed future legal cases arising from the Act. The overarching purpose is usually taken into account. Before he left the CMA, the noble Lord, Lord Tyrie, as its chair, called on government to strengthen the CMA’s consumer duty, writing that the internal market will work for consumers only if it is
“fair, competitive and adequately, proportionally and properly regulated.”
Amendment 1 would ensure that legislation on how the internal market is governed has this objective hardwired, or mainstreamed, into its overarching purpose.
A clear example of why this is so necessary is the Agriculture Bill. The Government refused to accept a UK-wide commitment to retaining food standards. I gather that Prue Leith has resigned from the Conservative Party in reaction to that rejection. More importantly for this Bill, just because the UK Government do not want to guarantee high food standards for consumers does not mean that the other countries of the UK do not.
As we roll out a new internal market for the UK, it is essential that an overarching objective of the legislation—the interest and well-being of consumers—be written into the Bill. Given the role of the CMA with regard to this Bill, it is similarly important that it has the duty to the consumer at the forefront of its work. As the noble Lord, Lord Tyrie, said, for the internal market to work for consumers, the CMA must be fit for this task:
“Until Brexit, much of the competition work lay with the Commission. If we are to ensure our companies play fair, do not profit at the expense of ripped off customers, are overseen ... by a competent authority, we need ... changes to the ... composition and duties of the CMA”,
“needs new duties to act quickly and with the consumer interest paramount and powers to make this possible”.
The amendments in this group are part of the effort to achieve these aims. Amendment 1 adds the duty to the purpose of the Bill, and Amendment 112, also in my name, adds it to the CMA’s objectives.
The group addresses two other issues: what is known in EU-speak as proportionality, and procurement. Amendment 2 in the names of my noble friend Lord Stevenson, the noble Lord, Lord Anderson, and the noble Baronesses, Lady Bowles and Lady McIntosh, would write the principle of proportionality into law to make sure that the Government, in exercising their powers under the Bill, do not go further than is necessary to effect mutual recognition and non-discrimination; and, vitally, that they respect the principle of subsidiarity whereby matters are agreed at the most local level possible. This would make sure the Government act only when their objectives cannot be achieved by the devolved authorities and would be better done at UK level.
The Government recognise and use this principle of proportionality. Indeed, just last week they tabled an amendment to the Medicines and Medical Devices Bill—which I believe is in Grand Committee even as we speak—stating that disclosure of information relating to medicines covered by international agreements may take place only where it
“is proportionate to what is sought to be achieved by it.”
That same principle needs to be hardwired into this Bill to make sure the powers are not used—for convenience or whatever—by the UK Government when they could be used better by the devolved authorities.
As the Minister will know, having been around the EU for some time, subsidiarity was not always in the EU mandate but, once introduced, influenced all decision-makers’ thinking, making them think twice before taking powers to themselves at too global a level. For those reading this in Hansard, the Minister at this point has a very disbelieving look on his face.
Finally, Amendment 59 in the name of my noble friend Lord Stevenson aims to retain public procurement as a devolved matter, thus exempt from market access principles. This is not to say that public procurement should not adhere to recognised principles, but to ensure that these are covered in the existing work on common frameworks in a public procurement framework. Since 1998, public procurement has been devolved, and our leaving the EU is no reason to alter this or for it suddenly to become a reserved matter, especially when a framework is already being developed. The Government have given no rationale for trying to make it reserved. In the White Paper, they said, without any reasoning:
“For goods, non-discrimination will apply within certain excluded areas such as procurement.”
They said they were considering—only considering—whether and to what extent non-discrimination should apply to public procurement. Perhaps the Minister could provide an update on their thinking. Perhaps he could also explain why Whitehall thinks it can deal with procurement any better than the devolved authorities, particularly given the recent example of UK-wide public procurement under Covid.
There are real concerns about simply handing public procurement to the Government, given that the WTO’s general procurement agreement, which would replace the UK’s 2015 regulations, would not include socially responsible public procurement provisions unless they were nailed down in advance. Amendment 59, therefore, aims to prevent the loss of these safeguards and keep public procurement devolved so that price-quality ratio, rather than simply price, is included in tender evaluation criteria and can be maintained by the devolved authorities along with the normal requirements of value for money et cetera. We want a UK-wide internal market to work for consumers and business, to safeguard standards, maintain the environment and ensure that competition does not fuel a race to the bottom. That would be good for neither workers nor consumers, nor indeed for businesses. These modest amendments would help to achieve that objective. I beg to move.
My Lords, I am pleased to support Amendment 2; I was about to do my own version when I discovered that the noble Lord, Lord Stevenson, had already tabled a similar one, and it is pleasing that it has cross-party signatories. There is a lot in this Bill about the internal market that is either premature or inadequately or inappropriately worded. It may be that amendments elsewhere referencing the common frameworks will help, but just as the common frameworks have a set of principles that are being followed in negotiations, a bit more about the flavour of the internal market is needed here, beyond mutual recognition and non-discrimination.
One of the principles for the common frameworks is to maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as is afforded by current EU rules. Therefore, it seems wholly appropriate to utilise the principles of subsidiarity and proportionality that have been a defining part of the EU internal market and which have helped form the current flexibility. It would also chime with the recommendations of the Constitution Committee in its report The Union and Devolution, which set out six principles of solidarity, diversity, consent, responsiveness, subsidiarity and clarity. We could use all those principles here too, and certainly they should guide how we approach amending this Bill throughout.
I will not pretend that the internal market concept is easy once flexibility and diversity are acknowledged. There were times when I found the EU internal market challenging to get my head around, and other times when I fought against overbearing efforts of the EU Commission on behalf of the UK. Therefore, I expect it will be the same for the UK, but on a much more intimate basis that, perversely, and along with the relative size of England, makes it more sensitive. That means taking the greatest care and sensitivity throughout this Bill, and Amendment 2 is a very good way to start.
Amendments in this group about the environment and the consumer touch on important matters that come up in other places in this Bill. Rather strangely, I find myself in a bit of a dilemma, which I will try to explain. To some extent, it is set against the background of the CMA as we know it now. I have a little concern about always including consumers at every opportunity, although citizens are, of course, at the heart of everything in the end. My concern is based on the internal market being for everyone—for all sectors and for citizens generally—and that is part of getting the balance right. I understand the concern that big business may have had too much of a say so far, and I said so at Second Reading, but I also have concerns about the term “consumer” being given preference, for example, over jobs and everything else; it may well have the opposite effect from what is hoped, because “consumer” is so multifaceted. That is particularly so in respect of the CMA, where price to the consumer already weighs heavily in the competition agenda, above diversity and choice. The comments of the noble Lord, Lord Tyrie, focused on rip-offs, which are very important to avoid, but that shows the concentration on price.
When we come to look at what we want to do and the concept of the devolved Administration, other matters such as diversity, choice and quality are not necessarily reflected if the price ticket always gets attached to being what the “consumer” is all about. Therefore, my heart is telling me that the broad sentiment is right, but my head is asking whether the amendment is, perhaps, not yet quite right or not in the right place. I will, of course, be listening, as the debate progresses.
My Lords, I support Amendments 1 and 2, to which I have lent my name; they are probing amendments to ask the Government a number of questions. The concept of the internal market in European Union terms is relatively recent: we have only had the single market since 1992. Of course, devolution followed some five years later, so both are still relatively new in terms of the British constitution.
British competition rules are loosely based on—and generally have always reflected—the original competition rules of the EU treaty on state aid in Articles 85, 86 and 92. The noble Baroness, Lady Hayter, has been right to highlight that, in what we have been used to in terms of both EU competition rules and British competition law as applied by the CMA, what is missing in the Bill is a reference to consumers. The flip side of competition policy to make sure that companies behave well is to ensure fair competition as well as protection of the consumer. I wonder whether leaving out any reference to consumers, both here and in later parts of the Bill, was deliberate. Why is there is no specific reference to consumers in the Bill, as Amendments 1 and 112 would provide?
Equally, Amendment 1 relates to safeguarding and the environment. That begs another question. We are told that our current regulations setting out food safety can always be changed by secondary legislation and that we do not need an Act of Parliament to do so. But that could lead to the situation—particularly if it remains devolved, and the Government have repeatedly stated that this is their intention—where we have to ask: to what extent will divergence be tolerated? For example, if the Food Standards Agency of England made substantial changes to our food safety requirements, would Food Standards Scotland simply diverge and not necessarily follow those changes? In future, could a product produced in Scotland, meeting Scottish environmental and animal welfare standards—I will be supporting the forthcoming amendments regarding those—still be allowed to be imported into England if it no longer met those same standards? This seems to be an obvious potential crisis for Scottish, Northern Irish and Welsh farmers some way down the road. The Government might want to rethink their idea of not having UK-wide standards. I would be most grateful if, when summing up, my noble friend could turn his attention to that potential conflict and the potential for divergence.
Turning to proportionality and subsidiarity, I absolutely agree with Amendment 2, to which I have lent my name, and later amendments. The Bill must clearly set out only what is necessary to achieve its stated objectives. My noble friend will probably answer that this is self-evident, but it bears repetition. Personally, I see some merit in having it on the face of the Bill. The principle of subsidiarity might seem clear now, but I ask my noble friend to consider the horrific situation, some five or 10 years down the road, when we may face a federal Britain. What impact would that have on subsidiarity?
On procurement, does my noble friend share my concern that despite all the potential benefits around procurement provisions that I envisage us enjoying by leaving the European Union—for example, we would no longer be bound by the threshold of €136,000, beyond which any public contract must be put out for tender, meaning that we could source many more of our English, Scottish, Welsh and Northern Irish foods into public institutions such as schools, hospitals, prisons and others—we have completely lost that advantage because through the Trade Bill we are joining the Agreement on Government Procurement, which, surprisingly, has exactly the same threshold of $135,000? We seem to be jumping out of the frying pan and into the fire, without getting all the opportunities that were promised to our farmers by leaving the European Union, such as sourcing more local food to schools, hospitals and other public institutions. That will in fact not come about, because we will be bound by international rules on public procurement. Have the Government done a cost-benefit analysis on how much competition we will face from other providers to source their foods into our public institutions, as opposed to the potential benefits our farmers might have from tendering in other international jurisdictions to source our home-produced food there?
I look forward to hearing my noble friend’s reply to this little debate.
My Lords, I want to add a few words in support of Amendment 2. Proportionality and subsidiarity are part of the language of EU law which, while relatively new in historical terms, we are now very familiar with. It would be a mistake to think that as we reach the end of the transition period, we should leave these concepts behind. Proportionality, after all, is deeply embedded in our own public law, and has been for decades. It has long since been recognised that black-letter law alone is not a good guide to the way in which public law and public affairs should be administered. One simple example can be found in the civil litigation rules, where the word appears to make it clear that the courts should seek to obtain a just result with appropriate speed and expense in giving effect to the rules that are set out in the document. The point is that individual facts and circumstances vary greatly across the spectrum. Proportionality allows them to be taken into account and avoids blunt decisions where a greater need is to fit the facts together with the rule to find a suitable result that will achieve the desired object.
Subsidiarity too is now deeply ingrained in our constitutional arrangements. It is part of the thinking behind devolution, and the word is used with reference not only to Wales, Northern Ireland and Scotland but to devolution throughout England. The great advantage of this is that local decisions are best taken with regard for local circumstances. For them to be taken centrally sometimes misses the point and leads to solutions that are inappropriate given the local circumstances. It is a useful tool best used in the administration of our affairs to make sure that things are properly organised across the whole of our United Kingdom, which, after all, is what our new internal market is all about.
Both these principles are sound and appropriate guides as to how the two basic principles which are set out in Clause 1 should be administered. I support the argument that, somehow, these principles should find a place in the Bill. Quite how that is done I leave to the draftsmen, but Amendment 2 is at least an important start to make sure that the significance and relevance of these principles are appropriately recognised.
My Lords, I offer a few comments on these amendments. It seems to me that Amendment 1 has the effect of confining the concept of the internal market to consumers and the environment. That completely misses the point. If we go back to the Government’s White Paper in July, we see they were clear that the policy objectives were economic opportunities across the UK, increasing competitiveness and making the UK the best place to do business, thereby supporting the general welfare, prosperity and economic security of all UK citizens. The amendment in the name of the noble Baroness puts the cart before the horse, trying to make that an overarching requirement when it should be a consequence of achieving all the other things.
I emphasise that this is about frictionless business—about making it easy to do business across the UK. In all our debates, we should not lose sight of the importance of this to the devolved nations. About 60% of the exports of Scotland and Wales go to the rest of the United Kingdom; for Northern Ireland, it is a fraction below 50%. They are important to those economies. We are trying to create an environment in which trade can prosper and grow within the UK, without barriers, which will in turn allow the other objectives to be achieved—for example, the protection of consumers and supporting the general welfare of the country.
I turn briefly to the other amendments in this group. I thought that the noble and learned Lord, Lord Hope, made the case himself that, to the extent that Amendment 2 applies to proportionality, it is not required because proportionality is already a principle of our public law, and so it is not necessary to write it into the Bill. I am also having great difficulty in seeing why subsidiarity—although I understand the arguments for respecting the interests of the devolved nations—should become one of the market access principles, because the market access principles are the overarching ones of mutual recognition and non-discrimination. I cannot see how we can have an equivalent principle of subsidiarity alongside mutual recognition and non-discrimination, which are the foundations of achieving frictionless trade.
Lastly, on Amendment 59, I cannot believe that we would want to establish in our country the notion that public sector purchasers can, in effect, discriminate against suppliers from other parts of the United Kingdom. That is what the amendment would, in effect, do by taking it out of market access principles.
My Lords, I support Amendment 1. There is very little that needs to be said in addition to what my noble friend Lady Hayter so clearly set out. In her speech she prayed in aid the Government’s attitude to the Agriculture Bill—which I also took part in—hence the necessity of the amendment. In my innocence, I am assuming that the Government will accept it, but perhaps I am too innocent.
I also support Amendment 2. The purpose of my speech is to serve as a pre-emptive strike to preserve the position of devolved legislatures, as I did in my Second Reading speech. I will make the same point regarding other amendments. Agriculture is a devolved matter. The single market is important throughout the United Kingdom. However, I am wary when power given to devolved Administrations and legislatures is taken away from them. The onus is on Her Majesty’s Government to prove necessity—hence the importance of the words in paragraph (d) in the amendment, which I particularly support.
My Lords, I agree with the first point made by the noble Baroness, Lady Noakes, who said that this group of amendments and this debate are about whether it is necessary and desirable to agree with the Government on the definition of mutual recognition and non-discrimination. The question is therefore whether the Government have made their case sufficiently that the Bill’s definitions meet the criteria that the White Paper sets out for the functioning of the single market, which is something that we all value.
I think that the Government have made a less than convincing case on the necessity of these definitions. However, even if it were necessary to make a strategic case for defining these market access principles, such a case was not set out in the consultation, the White Paper, the Commons stages or the Minister’s speech on Second Reading. Have the Government explained why they have deviated from our current approach or from the approach we had before we joined the European Union? We had a functioning single market before we joined the EU and while we were members, as we do now, and it has served our country well. Even before devolution, our internal market before we joined the EU allowed for different laws and approaches and historic divergences in many areas, including in economic development, trading standards and other areas linked to the economy. The question is why the Government have decided to move away from the earlier British approach or the British approach as it was adapted and adopted through the European Union.
Before I turn to the matter of definitions, I want to speak to Amendment 59 on procurement. Noble Lords who took part in the early Committee sittings on the Trade Bill will recall that we debated the procurement aspects. I specifically asked why procurement was mentioned in the White Paper but not in this legislation. The noble Baroness, Lady Hayter, has also asked that question, and I hope the Minister will give us a clear answer. As the noble Baroness, Lady Noakes, indicated, if procurement continues to be a devolved matter—as it has been, in many respects, under the framework of the European standards and the GPA international agreement—and the Scottish Government, for example, wish to have a procurement policy within an overall framework which sets standards for infrastructure or public buildings used for health or education, every supplier will have to meet those standards. That would not necessarily be discriminating against Scottish, English or Welsh construction firms; it would be a standard that they would be expected to meet. I fear that the Government want to have a uniform standard for the delivery of procurement policy across the United Kingdom. That would be worrying because it would be a significant move away from the flexibility we have had within the approach taken by the European Union.
There has been an assessment of the current approach taken within the EU single market—which we have left—which was updated in April 2020 in Regulation 2019/515. The current approach has a well-defined assessment procedure to be followed by competent authorities when assessing goods, which the Government’s approach lacks. The current approach has obligatory elements to be included in an administrative decision that restricts or denies market access. However, that is left open to UK Ministers to decide in a vacuum, and thus is lacking in the Government’s approach. Our current approach offers a voluntary mutual recognition declaration which businesses can use to demonstrate that their products are lawfully marketed in one EU country in a business-friendly, problem-solving procedure through the European single digital gateway for businesses and service providers on how this operates. These important aspects are missing in the new approach. I think it is therefore justifiable to ask on behalf of businesses across the UK which need to prepare for this, why the Government are not ready.
As will become clear in the debates on following groups, the Government are not ready for the implementation of this because the framework relationships are not yet in place. But even if they were, the Government have also failed to state why the nature and scope of the application of these market access principles are different from what we have understood and worked with for many years. For example, as Professor Nicola McEwen of Edinburgh University pointed out, the definition of indirect discrimination is not the same and is now more complicated than EU law. Not only that, Professor McEwen highlighted the circumstances in which mutual recognition rather than the non-discrimination rule will apply, or vice versa, which is different from the position under EU law. It is unclear how certain types of trading rules would be classified. She gives an interesting example of restrictions on the use rather than the sale or marketing of a product, such as the current ban on the use of electric shock training collars in Wales. There is no consistency in the Government’s approach on that. In further groups of amendments we will also need to explore why the range of exclusions and exceptions from the mutual recognition and non-discrimination principles is significantly narrower than under EU law.
The Government should tell us why the UK’s new approach is far more restrictive and more bureaucratic than the position we are moving away from. With a more restrictive approach, and without the previous flexibility that had been obvious in some areas, businesses, service providers and public authorities will have a much more burdensome single market to operate. The Government have presented no justification whatever for that. My noble and learned friend Lord Wallace of Tankerness raised this issue at Second Reading. In a reply, the Minister said why the Government are taking a different approach:
“The market access principles 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 marketing priorities”.
I note that the Government do not think that our nations have a diverse history and culture, but they most definitely do. If they did not, we would not have had devolution in the first place. However, it does not follow that our current approach, even with devolution, has been more streamlined, and the Government seek to have a more complicated approach going forward.
My noble and learned friend asked about subsidiarity and proportionality, and the Minister replied as follows, which is interesting, given the very well-argued speech of the noble and learned Lord, Lord Hope of Craighead. He said:
“Turning to your comment on subsidiarity and proportionality, 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 system.”
The noble and learned Lord, Lord Hope, stated categorically that these approaches of subsidiarity and proportionality are deeply embedded in our constitutional arrangements, so why have the Government chosen to move away from them? I fail to understand why they are even changing their position from that of the frameworks agreement that had been in place. Regarding the principles agreed among all the nations, the second paragraph of the agreement on common frameworks states:
“Frameworks will respect the devolution settlements and the democratic accountability of the devolved legislatures, and will therefore”—
this is the second bullet point—
“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as is afforded by current EU rules”.
So the Government agreed with the devolved nations that the current flexibilities and approach afforded by current EU rules would continue to apply, but this Bill argues that they will not. Given that this has implications for Scotland’s decision on minimum unit pricing or for a live case of the deposit return scheme that has been put in place, there are considerable concerns about why the Government have opted not to include environmental objectives in these restrictions.
I will close with another point on the environmental side. Can the Minister clarify the position on the relevant requirements for environmental aspects, which were formulated before this Bill but have yet to come into force? The Scottish deposit return scheme, which has been legislated for but is due to come into force in 2022, would, on my reading, come within the scope of this legislation. It has been made but is not yet in force. That legislation was fully compliant with the European approach because of the environmental objectives. Is it the Government’s intention that the Scottish deposit return scheme regulations will now be within the scope of this Bill? If not, this is just one example of why there are real difficulties with the Government not following the common-sense approach. The UK operated a single market before joining the EU and during its membership of the EU, and indeed our approach allowed for devolution to be accommodated within it. Why are the Government putting that at risk with their approach to these market principles, which are more restrictive, less certain, more bureaucratic and less clear? Why are they not seeking continuity?
My Lords, in that extraordinary vote on Tuesday last, your Lordships’ House indicated what it felt about the most objectionable part of the Bill, and I hope that we will have a chance to develop those arguments further next week. However, the noble Baroness, Lady Hayter, was right in her opening words to remind us that, although they are the overwhelming matters of concern in the Bill, they are not the only ones. Indeed, I find myself echoing what a number of your Lordships said in last week’s debate: what is the point of this Bill in its present form?
I draw your Lordships’ attention to the very trenchant comments in the devastating report of our Constitution Committee published last week. It indicated the committee’s unanimous real concern on the whole issue of devolution. Way back in the 1970s, I was not an advocate of devolution, and I sometimes think that my fears have come to pass. However, the fact is that we have devolution, and we cannot ignore what we have or we will truly endanger the future of the union, and that we must not do. Therefore, I very much hope that when my noble friend comes to wind up this debate, he will make it quite plain that he has taken on board our Constitution Committee’s comments on devolution.
We cannot ride roughshod over what has now been established for 20 years or more. If we do, we will truly endanger the future of the United Kingdom. Now that we are out of the European Union, which of course we are, no subject should cause more concern or potential heartache to any Member of your Lordships’ House than the future of the United Kingdom. It would be a constitutional and political tragedy if, a decade from now, Northern Ireland and maybe Wales but almost certainly Scotland had broken away. As a member of a mongrel family, a large proportion of whom still live north of the border, I would feel that to be the ultimate betrayal of the British Parliament and of the union, which it is our duty to safeguard.
I hope that, as we go through this Bill, we will remember how crucial it is that the United Kingdom survives. I hope that the Government will take on board the seriousness of this threat or danger to our country and head off the forces of English nationalism, which seem a little too predominant in my party at the moment.
My Lords, when the Conservative Party came up with its absolutely brilliant slogan about taking back control, many of us, for whom it resonated, felt that it meant that our Parliament would be taking back control. However, over the past year it has become obvious that that is not how the Government see it. In fact, they are using Brexit as an excuse to take more control of the country, which of course is extremely undemocratic. In this Bill, they are trying to seize control from the devolved Governments and Parliaments, and that, as the noble Lord, Lord Cormack, has just said, is extremely unhealthy for the UK. The Bill pretends to replicate what exists in EU law, but it has created a sort of Frankenstein’s monster, which is not at all what any of us were expecting. It is like a legal framework creating a bureaucratic bulldozer that the Government will use to grab more power.
It is obvious that this Government cannot win any seats in Scotland, Northern Ireland or Wales, so they are using this Bill—this bureaucratic bulldozer—to force the elected Governments of the devolved nations to fall in line with Conservative Party policy. These amendments are important because they would stop that undemocratic move. Without them, devolution will be replaced with a sort of lowest-common-denominator system in which the devolved Governments will have to wait for the UK Parliament to take action on any policy or law that relates to the production, distribution and sale of goods and services in the UK before they can take action. That is clearly not what any of us expected. The devolved Parliaments must continue to have the right to make decisions on improving environmental standards and implementing other legitimate policies that will benefit their nations. Your Lordships’ House must amend this Bill and prevent yet another government power grab, and of course protect the rights of the devolved nations.
My Lords, now that we are leaving the scope of the single market, the characteristics of the UK internal market become very important; that is why I put my name down to speak to this group and, in particular, to Amendments 2 and 59.
Superficially, it is easy to assume that the UK internal market should, and will, share the principal attributes of the EU single market but, of course, that is far from certain, not least because of the circumstances surrounding it all. After all, the creation of the EU single market was first agreed by member states in an IGC, which is very different from what we are looking at now in this country. The new arrangements have come into being in somewhat different circumstances and across a single territory in which there has been devolution—and within that, the different components clearly have different perspectives.
There is now much less consensus and no prior agreement. In these circumstances, within a devolved as opposed to a federal system, there are potential procedural problems where the UK Government and the English Government—if I might be allowed to call them that—are coterminous. It is not desirable for the repatriation of European competencies to drive a coach and six through the devolution settlement in these islands. For this reason, I believe strongly that Amendment 2 is important to provide a legal framework around the political procedures repatriating these powers. In my view, it is particularly important—I speak as both a unionist and a supporter of the devolution settlements—that England does not emerge as a bully boy imposing its will on the other countries. To do that would be to take the high road to the break-up of the UK.
I also want to touch on Amendment 59, in the context of my chairmanship of the Cumbria local enterprise partnership. As a border region and part of borderlands, any form of potential discrimination—be it direct or indirect, intended or unintended—poses a very real threat to our economy, much of which is focused on both sides of the Solway Firth. Competition law, environmental law and a number of other more general categories of social law are essential components of market economies in our kinds of societies in the 21st century. As a number of speakers have said, there is a real conundrum at the heart of this between local autonomy, which matters, and British cohesion and homogeneity, which also matter. I very much hope that the Minister will spell out exactly how the Government see these things interacting, because, as always, the devil lies in the detail.
My Lords, my concern in this group of amendments and, indeed, with the Bill as a whole is that a fundamental collision is taking place between what is happening in London and what is happening in the regions. I was never struck by the Sewell convention. I believe that we have not properly explained the source of funds to the devolved nations, and I do not believe that any country like ours should leave itself unable to function in certain parts of its own territory. Nevertheless, I believe that we are now paying the price for the haphazard, ill-thought-through lurch to different types of devolution that have been going on over the last 20 years in a virtually unco-ordinated way.
This collision is demonstrated by the fact that we had discussions taking place on the various common frameworks, which have been sort of set to one side and replaced with some of the provisions in the Bill. Probing amendments such as Amendment 2 are important. The Minister and his colleagues have to reassess where they are with all this because there is a pattern emerging—we have devolution and people are now more focused on their local identity. We see this happening in parts of England with the Covid crisis; it is really concerning. Some Members have already expressed their concern about the future of the union as a whole; I very much share that and have done so for some time.
Looking at the best way ahead, while the term “subsidiarity” is European, the general principle that you take decisions at the closest point to the people who are affected by them is a solid and sound way of doing business. There are examples of where the United Kingdom was until relatively recently still a very centralised country compared to some of our European colleagues and other countries around the world.
One other element not mentioned so far is that my own region of Northern Ireland will be subject to different laws on a whole variety of subjects, and it is not entirely clear to me where this will leave us. For nearly all of our economic activity, we will remain to all intents and purposes within the European Union, subject to European and state aid regulations, and there will be a whole, as yet unresolved, customs conundrum as far as our trade is concerned. How all these different measures are to be brought together in a coherent way is entirely unclear to me at this stage. I feel that this probing amendment and others in this group are important because they force the Government to explain to us how this will work in practice.
I accept the concept of common frameworks, in which you get general agreement from the devolved regions. Whether you agree with it or not, this Parliament has given them the power—the fact is that they have it and they are entitled to exercise the functions that have been devolved to them. We should not find ourselves in a situation where ultimately we sow the seeds of further clashes. That would undermine the union and our economy, and I certainly do not want to see that. The Government need to revisit these amendments and this section of the Bill. Unless it is clear and people know where they stand, we will have the sources of further friction built into our legislation—and we have more than enough of those at the moment.
I ask the Minister to address my point specifically: if Northern Ireland is effectively in the EU from an economic point of view, where is the line drawn between functioning under EU laws and regulations and, in the future, such things as market access being involved? I can see circumstances where there could be a significant clash. Procurement is one of the most obvious areas. A lot of small suppliers throughout the United Kingdom have felt that they have been discriminated against because Governments and various authorities have always tended to go to the bigger players. As was pointed out at the beginning of this debate, we could end up with almost the same threshold as we currently have as part of the EU. Will the Minister and his colleagues take seriously the concerns that Members of this House have been expressing about the fundamental clash—the collision—between our devolved settlements and our internal market? To me, that will be the key to making sure that this legislation does good and does not end up doing harm.
My Lords, it is worth reminding ourselves that we are talking about the Committee stage of an internal market Bill. I frankly do not see the relevance of the part of Amendment 1 which talks about the environment. We do of course have environmental laws. They are ever being strengthened and are an important part of our society. What they are not is anything specifically to do with an internal market.
We turn to look at consumers. I am a marketing man by profession. After university, having read economics, I joined the Reckitt and Colman Group as a marketing executive and later a marketing manager, in the UK, India and what is now Sri Lanka. I understand marketing. Marketing is about more than just the consumer. It is about those elements of a market that are all working within it. A whole host of bodies is working there. I share the view of my noble friend Lady Noakes. While the UK was in the EU, which I voted to stay in, we had all sorts of restrictions, some of which were very adverse to industry and commerce in this country—not all by a long way, but some were. We want an internal market where people who manufacture, sell, distribute, research and devise new products can succeed. We want that market there, without the stranglehold of having to agree with half a dozen other nations. That is absolutely key. It is not a simple matter of just worrying about the consumer. I think it was the noble Baroness who opened who spoke about driving competition to the lowest level.
Competition is very healthy but, of course, there must be safeguards. That is why in the Bill there is this new body, the office for the internal market, working alongside the CMA. I criticised the CMA at Second Reading and I believe those criticisms were valid. I want to see this office for the internal market really have teeth and really be able to operate. Reflecting on Second Reading, frankly, it is not right in the Bill to just have a review after five years. We have enough evidence in modern society to recognise that things move much more quickly these days than they ever used to. I put it to the Minister that Her Majesty’s Government should consider a three-year review of that body.
On Amendment 2, it is already part of our public law, so why does it have to be written here—if that is right? It comes later, under Part 5, but we cannot have a situation whereby all parts of the UK can have their own minor arguments on whatever product or service it may be. Then we would end up with everybody having a different viewpoint. That does not seem to me at all sensible. My plea to the Minister is that this is a very exciting time if you are a UK manufacturer, trader, in financial services, in hospitality, in the professions, a retailers or wholesaler, or an online trader. Certainly, in my former constituency of Northampton, they look forward to this internal market.
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.
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.
Lastly, on the question asked by the noble Lord, Lord Purvis, about the Scottish deposit return scheme, if that legislation comes into force after 30 January 2021, it will indeed be covered by the market access principles. However, we are confident that the deposit return scheme can be brought into effect in full compliance with the market access principles that we have set out in this legislation.
My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.
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?
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.
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.
Amendment 1 withdrawn.
Amendment 2 not moved.
We now come to the group beginning with Amendment 3. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment or anything else in this group to a Division should make that clear in the debate.
3: Clause 1, page 1, line 11, at end insert—
“( ) This Part only has effect during any time when the United Kingdom is fully in compliance with—(a) the terms regarding the United Kingdom internal market set out in the Northern Ireland Protocol, and(b) the terms of the Good Friday Agreement which are relevant to the United Kingdom internal market.”
My Lords, in moving Amendment 3 I wish also to speak to Amendments 157 and 177, standing in my name and those of the noble Baronesses, Lady Ritchie, Lady Altmann and Lady Suttie, for whose support I am most grateful. I spoke on this Bill at Second Reading and set out my fundamental objections to it then. In particular, along with a clear majority in this House, I totally rejected Part 5, which deliberately and cynically drives a coach and horses through the UK’s respect for the rule of law. Not only that, it drives that same coach and horses through the protections we need for the Good Friday/Belfast agreement that successfully brought an end to most of the Troubles, which had blighted life in Northern Ireland since the 1960s.
In that Second Reading debate and in the Committee stage debate on the Trade Bill, I put on the record of this House the horror and disbelief felt well beyond the shores of this United Kingdom. The most striking reaction was that in the United States, where the current President’s Northern Ireland envoy—his former chief of staff—agreed fundamentally with their rivals in the Democratic party that they cannot do any trade deal with the UK if the UK acts against the Good Friday agreement. That is exactly what is happening here in this Bill. It is a legal document that works against the peace agreement for Northern Ireland. In proposing this, the Government have pulled off a spectacular feat in uniting Republicans and Democrats at a time when they have never been more divided. This, of course, is not a feat but a spectacular own goal, even by the standards of this Prime Minister and this Government.
Since I last spoke, the front-runner in the US presidential election has made his position even clearer, in case people were not listening the first time. I want to add to the record of the House the relevant lines from his policy paper, Joe Biden, Irish-America and Ireland, published on 18 October: Joe Biden
“will support active US engagement to advance the Northern Ireland peace process”
and will ensure that there will be
“no US-UK trade deal if the implementation of Brexit imperils the Good Friday agreement.”
There is nothing subtle here. The front-runner to be President of the United States does not like what he sees as this Government seek to implement Brexit. He is sending a strong warning to us, and we in this House have it in our power, through this Bill, to force the Government to change course.
I am sad to note that the Government’s weak and pathetic defences include the wholly spurious argument that this Bill actually protects the Belfast/Good Friday agreement. Words such as “consent” are thrown about in a misleading way—to put it charitably—in order to create an impression that the purpose of these clauses is to protect all those who brought about the peace agreement. Let us look at all those who did that.
First and foremost, there are the people of Northern Ireland. They voted overwhelmingly for the agreement in 1998 and voted firmly against Brexit in 2016. They went on to vote overwhelmingly for parties opposed to Brexit in last December’s parliamentary election. Secondly, there are the political parties themselves. The majority of parties, representing the majority of the people of Northern Ireland, are opposed to this Bill. Thirdly, the Irish Government, the UK Government’s co-guarantor of our peace process, are opposed to this Bill. Fourthly, the United States, which provided the broker for the agreement in Senator Mitchell and has supported it ever since, is unanimous in its opposition, whatever the result of the forthcoming presidential election. Fifthly, the European Union, which backed up the agreement through PEACE funding and through the openness of the single market, is clear that the Bill is in breach of the Protocol on Ireland/Northern Ireland.
Not one of these groups supports what the Government are attempting through this Bill, so whose consent exactly do the Government think they have? I have been racking my brains to think of anyone, but all I have come up with are the Brexit extremists in the Conservative party and the most Brexit-obsessed end of one political party in Northern Ireland, the DUP—that is it. It has now emerged that both Brexiteer and Unionist-sympathising MPs were, late last year, promised an opportunity to address their concerns about the protocol in order to persuade them to pass the European Union (Withdrawal) Bill into law. It therefore seems most probable that No. 10 always had a step like this in mind, even at the very time of signing the withdrawal agreement. So much for the British Government negotiating in good faith.
The rebel MPs in question continue to urge that Boris Johnson should ditch the Northern Ireland protocol, whether there is a trade deal or not. It is a matter of speculation whether the Prime Minister’s sponsorship of the current United Kingdom Internal Market Bill reflects an anticipation of a no trade deal outcome to the current negotiations with the EU or is a tactical ploy to dissuade it from insisting on a level playing field if Britain is to have tariff-free access to the EU single market. Seeking to secure a trade agreement by threatening to break the terms of a recent treaty seems an odd way to win the trust of a trading partner, and, as the biggest integrated market in the world, the EU is unlikely to yield to bullying threats from No. 10.
The European Commission, which has a mandate from member states’ Governments, including the Republic of Ireland, rightly regards this draft legislation as a breach of international law and has begun proceedings at the European Court of Justice. Unsurprisingly, the Prime Minister’s concession that the Commons must approve the controversial plans at a later date has made no difference to the objections of Brussels to his plan to renege on that agreement.
Yet the Government continue to defend the indefensible. They also claim that these amendments would be “superfluous”, and therefore unnecessary, as the Government’s commitment to the Belfast/Good Friday agreement is clear. I am afraid that the Government’s commitment to the agreement is a million miles from clear. Instead, they are using it—a fragile peace agreement that has saved lives for over 20 years now—as a bargaining chip in the belief that they can gain some short-term advantage in the negotiations with the EU.
The changes introduced by the Bill do not in fact amount to just a “specific and limited” adjustment made in the light of, for example, unforeseen circumstances. The purpose of the Irish border protocol is to ensure that the customs and regulatory alignment between the Republic of Ireland and Northern Ireland, which has underpinned an all-island-of-Ireland economy and is necessary to avoid a harsh border on the island, remains in place, even if there is no trade deal after 1 January. The reason this is so vital is that these questions do not relate only to trade; in order to give practical effect to the identity provisions of the Belfast/Good Friday agreement on the entitlement to identify as British, Irish or both, it is essential that the customs border, removed by the EU single market from 1 January 1993, should not return.
UK membership of the EU facilitated the delivery of the agreement in a manner which respected both communities. It was the Johnson Government’s choice of a hard Brexit which has brought about the need for a border in the Irish Sea, to avoid a hard border on the island of Ireland. The land border is 310 miles long, with over 200 crossing points, 110 million people crossing annually and up to 30,000 crossing daily for work. The Northern Ireland Statistics and Research Agency estimates that two-thirds of Northern Ireland-Republic of Ireland trade is linked to cross-border supply chains.
In view of the potential consequences for increasing the tensions within Northern Ireland/Irish border communities, it is chilling to note that Clause 47 explicitly disapplies Section 6(1) of the Human Rights Act, which requires public authorities to act in a way that is compatible with the European Convention on Human Rights. This means that regulations made under these clauses cannot be struck down on the grounds of human rights, as they normally could be as secondary legislation.
The Government are now claiming that the deal they made with the EU in 2019 was “legally ambiguous” and that Northern Ireland would be isolated from the UK—something which they say, implausibly, was unforeseen last year. We need to ensure that these objectionable measures to disapply the protocol, which were not included in the Conservative manifesto and are in conflict with Parliament’s approval of the withdrawal agreement, are voted down in your Lordships’ House.
To those who want to defeat these amendments by arguing that they are superfluous and appealing to this House to “trust us”, I respond: “We can’t trust you; we don’t trust you; you’ve proved, sadly, why we can’t trust you.”
Of course, the provisions of the present Bill, as amended by the Government in the House of Commons, do indeed propose to break international law in specific ways. For example, they allow the UK Government to break the protocol to waive the requirement for export declarations from Northern Ireland to Great Britain. Ministers can also decide whether goods moving from Great Britain to Northern Ireland need border checks and can curtail the scope of EU state aid rules that could otherwise potentially apply in the UK through the protocol.
State aid is an important and complex area. It appears that the Government are trying to pull back from the relevant provisions in the protocol because they were apparently warned by civil servants earlier this year that these could reach back into the rest of the UK. Nevertheless, according to the Financial Times of 14 September, the recent trade agreement with Japan commits the UK to tougher restrictions on state aid than the Government are willing to offer to the EU. Products from Northern Ireland produced to EU standards will still be covered, as there is already an existing deal between the EU and Japan. There may, however, be potential conflicts between future free trade agreements entered into by the UK with other countries and access for products from Northern Ireland.
There have also been plans by the Government to use a future finance Bill to overcome another aspect of the protocol, covering payment of tariffs on goods entering Northern Ireland, which would otherwise be necessary under the withdrawal agreement.
The EU has been seeking common high standards in return for tariff-free access, with legal guarantees that neither side will seek an unfair competitive advantage. The UK has in the past been supportive of the EU state aid regime, but the Government announced on 9 September that after 1 January the UK would follow the relatively light WTO anti-subsidy rules and would not announce details of its new regime until 2021—in itself seen as a provocation by EU negotiators.
The precise impact of the United Kingdom Internal Market Bill will of course depend on the outcome of the UK-EU trade talks, which have themselves been thrown into doubt by the proposals in this Bill. The Government are claiming that these powers are just a safety net. However, there is nothing in the Bill which limits the use of this legislation to circumstances where there is no trade deal.
The Prime Minister should abide by the terms of the withdrawal agreement and use the forum which was set up under it—namely, the joint committee for the protocol on Ireland/Northern Ireland, which is co-chaired by Michael Gove for the UK and Maroš Šefčovič for the EU—to resolve the outstanding issues on the movement of goods between Great Britain and Northern Ireland after 1 January 2021. In other words, there is a mechanism to deal with some of the issues that arise from the protocol in respect of trade across the Irish Sea.
Amendments 3, 157 and 177 therefore effectively ensure that this Bill cannot come into force unless the full provisions of both the Irish protocol and the Good Friday agreement remain intact. Even if the Government listen to the clamour and remove Part 5, the amendments seek to add much-needed protections which the Bill could really benefit from. They bind the Government to fully respect the Belfast/Good Friday agreement, the withdrawal agreement and the protocol on Ireland and Northern Ireland.
The amendments therefore provide much-needed safeguards for the protection of two international agreements that the United Kingdom has entered into and ratified freely—namely, the Belfast/Good Friday agreement and the Northern Ireland protocol within the EU withdrawal agreement—and with them continued peace and security for the people of Northern Ireland. I urge your Lordships’ House to support these amendments, and so important are they that I will seek to discuss with colleagues dividing on Report.
My Lords, it is a pleasure to follow my noble and honourable friend Lord Hain, who is instructive in this regard as a former Secretary of State for Northern Ireland, and who has quite clearly shown the need for these amendments as safeguards to protect the Good Friday agreement and the withdrawal agreement, with direct reference to the Northern Ireland/Ireland protocol.
As somebody who grew up in Northern Ireland and comes from a democratic nationalist tradition but seeks reconciliation with my unionist neighbours, I am in absolutely no doubt that the Bill as currently drafted in terms of trade could cause innumerable problems for north-south co-operation, east-west co-operation between Ireland and Britain, and internal co-operation in terms of the need to build relations between unionists and nationalists—the very thing that the Belfast/Good Friday agreement, as an international treaty, sought to address.
As the noble Lord, Lord Hain, has referred to, in that regard we had the support of the European Union, underscored by peace funds underscored by the United States of America. It is significant that the front runner and others, such as the US envoy to Northern Ireland, have quite clearly stated that this current Bill, with the fracturing of the agreement and the fracturing of the Northern Ireland protocol, could imperil the Good Friday agreement and imperil those relationships. They would not countenance, at this stage, the Bill remaining in its current form, with particular reference to Part 5 on a trade deal with the UK. That is a particular warning signal from one of the biggest Administrations in our global world.
These amendments focus on the need to ensure that the provisions of the Bill cannot be enacted unless they are compliant with the Good Friday/Belfast agreement and the Northern Ireland protocol—and, as my noble friend Lord Hain said, they do provide that necessary safeguard and protection.
Amendment 3 seeks to ensure that the “UK Market Access: Goods” section—Part 1—will have effect only when the UK is fully compliant with the terms regarding the UK internal market set out in the Northern Ireland protocol and the terms of the Good Friday agreement that are relevant to the UK internal market.
Amendment 157 requests the insertion of a clause specifically about the Good Friday agreement to
“address the unique political circumstances on the island of Ireland … maintain the necessary conditions for continued North-South cooperation … avoid a hard border between Northern Ireland and the Republic of Ireland”—
which is what the Northern Ireland protocol was designed to do, and which is clearly and specifically referred to in the withdrawal agreement that was signed by the Prime Minister last year with the European Union—and
“support, protect or implement the 1998 Good Friday/Belfast Agreement”
in so far as it is relevant to the UK internal market.
Amendment 177 is quite instructive, in that it states in the rubric explanatory section:
“No provisions of this Act come into force unless the United Kingdom is … fully in compliance with … the Northern Ireland Protocol … and … the terms of the Good Friday Agreement which are relevant to the United Kingdom internal market.”
Each of these amendments builds on the others, stressing the importance of the Belfast agreement and the Northern Ireland protocol to British-Irish relations and underscoring the bipartisan approach between Britain and Ireland that I have already referred to. In fact, the protocol stresses the essential elements of strands 2 and 3 of the Belfast agreement in respect of north-south economic co-operation and British-Irish relations. So it is important: we need to utilise the machinery of the Good Friday agreement to develop such relations as the North/South Ministerial Council and the British-Irish Council.
It does sadden me that the Government insist that they are trying to protect the Good Friday agreement. Nothing could be further from the truth, because in actual fact, through this United Kingdom Internal Market Bill, the Government are quite specifically fracturing that agreement and fracturing the withdrawal agreement that they signed up to this time last year.
The European Union Committee report, which was published some 14 days ago, has also been particularly instructive in relation to this issue. The committee states that there has been an “inherent tension” at the heart of the Northern Ireland protocol from the outset, due to the divergent expectations of the two parties: for the Government, it is
“maintaining the territorial integrity of the United Kingdom, and its internal market”
and for the EU it is
“to maintain the integrity of the Single Market and the customs union.”
Originally, the idea was to negotiate, in good faith, a pragmatic compromise, providing proportionate safeguards to protect the 1998 Good Friday agreement in all its dimensions. The Lords European Union Committee argues that, instead, the Bill elevates one element—the integrity of the UK internal market—above the others. That is the danger with this particular Bill.
The EU Committee further illustrates an important point, and hence the need for these amendments to be accepted by the Government. If they are not, I hope that my noble friend Lord Hain will pursue these on Report and that in his discussions with the usual channels, he will press them to a vote. These amendments would secure that those important, interlocking relationships were respected and honoured.
The EU Committee further states:
“By focusing solely on Northern Ireland’s relationship with the rest of the UK, the Bill fails to reflect that balance, and … it could pose a threat not just to the Withdrawal Agreement (including the Protocol on Ireland/ Northern Ireland), but to the maintenance of the Belfast/Good Friday Agreement.”
This point has already been referred to by the Anglican Church hierarchy’s letter of last week to the Financial Times, which was addressed by the most reverend Primate the Archbishop of Canterbury last week. The letter states:
“The UK negotiated the Northern Ireland Protocol with the EU to ‘protect the 1998 Agreement in all its dimensions.’”
It then talks about breaking the protocol, as well as breaching a fundamental tenet of the Good Friday agreement by limiting the incorporation of the European Convention on Human Rights in Northern Ireland law, as has already been referred to by the noble Lord, Lord Hain. This will be dealt with in greater depth in Amendment 161 in Part 5 of the Bill, whenever it is discussed next week in Committee, because the principle of reconciliation is fractured by the Government through the contents of this Bill.
Put simply: in urging support for these amendments, I again reiterate my statement of last week on Second Reading that, in the process of the contents of this Bill,
“the Government managed to set the nationalist and unionist communities against each other and undermine relations with Dublin”—
where there was a bipartisan approach—
“by leaving the possibility of a hard border on the island of Ireland on the table for so long.”—[Official Report, 19/10/20; col. 1382.]
There is an urgent need to remove the inherent illegality in this Bill and the threat to peace and prosperity in Northern Ireland. These amendments seek to ensure that that peace is protected, that the Good Friday agreement is protected, that the protocol is protected and that that is placed on the face of the Bill.
My Lords, I have added my name to these amendments, moved so excellently and explained clearly by the noble Lord, Lord Hain, and of course the noble Baroness, Lady Ritchie of Downpatrick. So I will not spend too much time going through the proposals of these particular amendments. I would just like to ask the Minister, from these Benches, why the Government are objecting to these amendments being in the Bill.
I understand that one of the arguments is that they are superfluous or not really required. However, given the clear lack of trust or concerns about some aspects of recent statements, and given that, I assume, the Conservative and Unionist Party is indeed committed to the Good Friday agreement, to no hard border on the island of Ireland and to the terms of the Northern Ireland protocol—on which this Government were so recently elected and which our Prime Minister signed up to—this amendment merely aims to ensure that measures in the Bill are fully compliant with both the Good Friday agreement and the Northern Ireland protocol, which was part of the great deal that the Government negotiated and put to the country. If Part 5 is a negotiating tactic and the Government really do not intend to use it and are aiming to get a deal, or if there is no deal, surely we still need to respect the Good Friday agreement, and our internal market needs to respect the promises made that this Northern Ireland protocol will be part of our future relationship with the EU.
I ask my noble friend to explain why the Government are unwilling to accept these amendments and to confirm that our party wishes to maintain our country’s reputation for upholding the legal agreements that we have reached with other countries in good faith.
My Lords, I start by apologising to the noble Baroness, Lady Ritchie, for speaking over her earlier; I had not realised that I had already been unmuted.
The issue of the Northern Ireland protocol is about nothing more nor less than peace and stability in Northern Ireland and peace and security in the United Kingdom. I share the view given with such clarity a moment ago by the noble Baroness, Lady Altmann, that this matter should be explicitly declared in the Bill. There is nothing more important to national security and public safety than the Good Friday agreement. It celebrates the 21st birthday of its effectiveness on 2 December this year. My interest in the Good Friday agreement arose from my time as Independent Reviewer of Terrorism Legislation and the years that followed. I have followed very closely both the sometimes fractious, but surviving, political process in Northern Ireland and the recent history of residual terrorism in Northern Ireland. Although it still exists, it is much reduced and is well understood, now, at least, by the authorities.
The Good Friday agreement has secured the United Kingdom. If you visit Northern Ireland and look at its political and business institutions and public authorities, you will see that it has given them a sense of benefit which is sometimes not matched in other parts of the United Kingdom.
I pay tribute to the political parties in Northern Ireland, some of which were regarded as enemies of the people until the Good Friday agreement—and whose presence at St Andrews caused a good deal of criticism of the then Government—for the way in which they embraced constitutional activity in the political issues of Northern Ireland. I once spent some time with some ex-terrorists who had, by then, become respected politicians. I was hugely impressed by the way in which they embraced those constitutional proprieties, both in Northern Ireland and the Republic of Ireland.
There is no more important issue in the context of Brexit than ensuring that nothing is done to undermine in any way the Good Friday agreement. Everything else fades into unimportance. We must be clear that no sacrifices of the stability that the Good Friday agreement has brought will be made in the name of Brexit.
I will listen with great care to what is said by the noble Lord, Lord True, in replying to this short debate. I hope we will hear unequivocally from him not only that nothing will be allowed to happen that undermines the Good Friday agreement but that the Government are prepared to declare that in the Bill.
My Lords, after that speech from the noble Lord, Lord Carlile of Berriew, I am tempted to say “Amen” and sit down, but I will just add a few words. We will, of course, return to this subject when we debate the crucial Part 5 of the Bill.
All I really want to say to your Lordships is this: the Good Friday agreement is the greatest cross-party agreement since the war. It is the achievement, of course, of the Blair Government, but it is also the achievement of the John Major Government. As Tony Blair himself has admitted on a number of occasions, particularly when we had that great ceremony with the Taoiseach in Westminster Hall shortly after the Good Friday agreement, without the groundwork of John Major, Albert Reynolds and others, this could never have come about.
It would be an act of supreme folly if anything we did in this Parliament endangered the continuity of the Good Friday agreement. It is absolutely crucial that each and every one of us recognises this. In whichever party we sit, or on the Cross Benches, this agreement is our heritage and it is our duty to conserve it. It is nothing to do with whether you are on the Brexit or remainer side; that argument is over. What is not over is the continuing relevance and importance of an island of Ireland without hard borders and the principles and achievements of the Good Friday agreement being maintained.
I had the honour to serve as the chairman of the Select Committee on Northern Ireland in the other place. There were many memorable moments, such as addressing a meeting in Crossmaglen with my committee, which would never have been possible without the agreement, but my most memorable moment is this: being asked by the late Lord Bannside, or Ian Paisley as he was then, if I would be kind enough to have a private meeting with him. This was soon after the joint Executive had come into being, and of course Lord Bannside had not been altogether helpful at the time that the agreement was forged. When I congratulated him on working with Martin McGuinness, he said to me, “I have discovered that Martin McGuinness has a spiritual dimension.” I could have fallen off my chair. When I went to Ian Paisley’s farewell at Hillsborough, attended by the Taoiseach and others, a panegyric—and it was that—was delivered by Martin McGuinness, thanking his friend and mentor. We have come a long way and had some rough passages since then, but I will always remember that as an extraordinary illustration of what a political agreement can achieve. We must not jeopardise that.
I am glad that this was introduced by the noble Lord, Lord Hain—he was himself a notable contributor to all these things and has been since. We must not put this at risk.
My Lords, it is a pleasure to follow my noble friend Lord Cormack, who has spoken so passionately, as did the noble Lord, Lord Carlile. I, too, also pay tribute to the contribution made by the then Conservative Government at the start of the Good Friday agreement. Speaking on the eve of the US elections, never has it been more timely to remind ourselves of the ongoing importance of that agreement.
Given that I do not think that there will be another opportunity to do so, perhaps I may briefly refer to the original Clause 1(3) which states that the principles set out in that clause
“have no direct legal effect except as provided by this Part.”
If they have no direct effect, presumably statutory instruments will need to be introduced for them to have effect. Will they become directly applicable at the same time in all four constituent parts of the United Kingdom?
I welcome in particular the probing nature of Amendment 3. I shall refer in passing to the evidence that we took in the EU Environment Sub-Committee. I am disappointed by the seeming lack of urgency reflected by the Government in preparing, in particular, farmers, producers, the road haulage industry and other interested parties involved in the production of or associated with agri-food, which of course is a mega business for Northern Ireland. In our letter to the Secretary of State, we concluded:
“We urge the Government to consider the likely impacts on Northern Ireland businesses and consumers of the increased levels of checks and controls that will be required as a consequence if the UK-EU future relationship negotiations are not successful.”
We noted that in his original reply the Secretary of State did not acknowledge the challenging timetable to implement the protocol in this regard. I know that when we come to discuss Part 5, there will be opportunities to consider this in more detail, but Clause 11 already looks at some of the details in Part 1 that relate to this.
I will use this opportunity to ask the Minister to assure us that in parallel with the consideration of this Bill, that what the Secretary of State said in reply to the sub-committee on 7 October, which was that the Government are actively engaging with the Northern Ireland Assembly, along with Northern Irish farmers, producers, hauliers and all those who are involved in the agri-food industry to enable them to be fully prepared to do business on 1 January 2021, is the case. Leading up to July, the evidence we took indicated to the contrary. There had been no direct contact of any specific nature with the Northern Ireland Assembly and certainly not with those interested parties from which we took evidence. Can my noble friend put my mind at rest that this has now moved on and that there have been direct contacts with the Northern Ireland Assembly and with the parties that will be affected in this regard?
My Lords, it is a pleasure to follow the noble Lord, Lord Cormack, and the noble Baroness, Lady McIntosh. Along with the noble Baroness, Lady Altmann, they have shown that there is much agreement about this matter on all sides of the House. The noble Lord, Lord Cormack, always speaks with passion, conviction and experience on matters to do with Northern Ireland, especially on maintaining the progress made since the 1998 agreement. I hope that his wise counsel was listened to by the Government Front Bench today. The noble Lord, Lord Hain, and the noble Baroness, Lady Ritchie, set out very clearly in their powerful speeches why we feel that these amendments are necessary, and I am very glad to have been able to add my name to Amendments 3, 157 and 177. As my noble friend Lord Carlile said so clearly, this is a matter of peace and stability.
I would like to make four points. As the noble Baroness, Lady Ritchie, and the noble Lord, Lord Hain, said, it is frankly staggering that the Government are claiming that they are acting to protect the Good Friday/Belfast agreement through the introduction of this Bill. As has been said by many noble Lords, it is the Government’s own withdrawal agreement and protocol that they are now trying to reverse through measures set out in this Bill. They were either wrong in their assessment of the impact of the withdrawal treaty on the Good Friday/Belfast agreement 10 months ago or they are wrong now. Can the Minister clarify which is the case?
My second point is that ahead of the Brexit negotiations, the European Union carried out an extensive exercise mapping the connections between the Belfast agreement and the single market. Clearly, it is important to recognise that north-south co-operation under strand 2 of the Good Friday/Belfast agreement has moved on extensively since 1998. Can the Minister say whether a similar mapping exercise was carried out by the UK Government on the potential impact on the Good Friday/Belfast agreement ahead of the drafting of this Bill?
My third point concerns the hugely important area of rights, safeguards and equality of opportunity. The Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland have expressed understandable anxiety about the protection of these rights following the introduction of this Bill. Can the Minister confirm that there will be no reduction in the rights as set out in the Good Friday/Belfast agreement and that the relevant obligations in the withdrawal treaty will be implemented in full? Can he also clarify whether an impact assessment was carried out specifically on the potential impact on rights and equalities?
My final point is about the Good Friday/Belfast agreement itself. We are blessed to have many noble Lords from all sides of the House who were directly involved in negotiating that agreement. We have several former Northern Ireland Secretaries, including the noble Lord, Lord Hain, who I have appreciated working closely with in producing these amendments. As my noble friend Lord Alderdice said in the Second Reading debate on this Bill last Monday:
“Those of us who spent many years of our lives negotiating and implementing that agreement had assumed that if we could find a new future for the people of our islands, we could find a way of maintaining our relationships with the rest of the European Union.—[Official Report, 19/10/20; col. 1357.]
This Bill now puts a very real strain on that relationship with our European partners, not least because of the potential impact on the Good Friday/Belfast agreement. When the Government committed to the Northern Ireland protocol, it was on the understanding that it was to
“be implemented so as to maintain the necessary conditions for continued North-South cooperation, including for possible new arrangements in accordance with the 1998 Agreement”.
Following the introduction of this Bill, do the Government still stand by that commitment?
It is deeply depressing, as the noble Lord, Lord Hain, has said, that Brussels and Washington appear to understand with greater clarity than this Government what is at stake if we start to disrupt the careful checks and balances based on trust and consent that are so essential to the Good Friday/Belfast agreement. That is why these amendments are necessary. We need to have this continuing commitment in the Bill. I look forward to hearing the Minister’s response.
My Lords, it is a privilege to speak in this important debate. I say straightaway that we on these Benches support the principles that have been outlined by my noble friend Lord Hain, and the noble Baronesses, Lady Ritchie of Downpatrick, Lady Altmann and Lady Suttie, who have all put their names to the amendment. The essence of this amendment is that the Government should commit themselves to doing nothing that breaches the Good Friday agreement.
There is no noble Lord who has spoken in this debate who does not agree that a critical part of the Good Friday agreement is an open border between north and south. No noble Lord does not agree that, if the border is closed, one of the essentials of the peace agreement goes—and that threatens security and lives in Northern Ireland. That view is obviously accepted not just by the Democratic Party in the United States of America but by the Republican Party.
The dilemma the Government faced in reaching a conclusion about how to Brexit was how to keep the border open yet, at the same time, leave the single market while giving the European Union security whereby the border between north and south would not be an open door for goods from the north of Ireland flowing into the single market to the south. The solution reached, which the current Prime Minister said was “brilliant” and which he formally endorsed “strongly”, was that goods in Northern Ireland and those brought into it which were at risk of going to the south would be compliant with the single market regulations—both regulatory requirements and the payment of duty. That would be achieved with checks on goods, in so far as necessary, coming from Great Britain to Northern Ireland. That was a good solution to the problem and was, as I said, adopted by the British Government.
It was also agreed that there would be four protections in the Northern Ireland protocol to ensure that the constitutional arrangements would not create difficulty for the unionist community in the north. First, there would be a joint committee to settle the detailed arrangements. Secondly, there would be an arbitration provision if there was a dispute about whether they went too far one way or the other. Thirdly, Article 16 would allow the British Government to impose their own measures, in accordance with the terms of the Northern Ireland protocol, if they were concerned about a threat to society, the economy or cultural links between the two. Fourthly, there is a provision for democratic consent if the people of Northern Ireland no longer wish to comply with the Northern Ireland protocol.
Those were the arrangements agreed by the UK Government. Now the Government say that we may not continue to comply with the Northern Ireland protocol. They are signalling to the European Union, to the Republic of Ireland and to the United States of America that you cannot rely on us in relation to the provision that keeps the border open. This Government have the impertinence to say that it is the European Union that is threatening the border. If you say, having just entered into an agreement, “We may not continue to agree or comply with it”, then of course the other side is going to think that you are not reliable. As it happens, you also trash our reputation as a country by doing it. You make this Government an absolute laughing-stock. First, Brandon Lewis said that they were breaking the agreement. Then the noble and learned Lord, Lord Keen, said that they were not. Then Brandon Lewis said, “Oh yes we are”. Then the noble and learned Lord resigned because of what Brandon Lewis said. Then Michael Gove said, “Maybe we are; maybe we aren’t”. That is the position of the Government of the United Kingdom, which has a reputation for complying with the law.
Could the Minister explain? First, are we breaking the law or not? Secondly, if we are, why are we doing so—or even threatening to—when we entered into those four protections to ensure that there was no pressure on the border between Northern Ireland and Great Britain? Thirdly, can he give the assurance required by my noble friend Lord Hain, and the noble Baronesses, Lady Ritchie of Downpatrick, Lady Altmann and Lady Suttie? We all require that the Government will do nothing that threatens the Good Friday agreement. Finally, will the Minister explain how it does not threaten an open border to say, as the British Government do, “We may not stand behind the Northern Ireland protocol”?
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.
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.
Amendment 3 withdrawn.
My Lords, we now come to the group consisting of Amendment 4. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anybody wishing to press this Amendment to a Division should make that clear in debate.
4: Clause 1, leave out Clause 1 and insert the following new Clause—
“Purposes of Parts 1, 2, 3 and 4
(1) Parts 1, 2, 3 and 4 promote the continued functioning of the internal market for goods (see Part 1) and services (see Part 2), including the recognition of professional and other qualifications (see Part 3), in the United Kingdom by establishing the United Kingdom market access principles.(2) The United Kingdom market access principles are—(a) the mutual recognition principle for goods and services, and(b) the non-discrimination principle for goods and services.(3) Those principles have no direct legal effect except as provided by Parts 1, 2, 3 and 4, and only to the extent that they have been agreed in a memorandum of understanding by—(a) the Secretary of State,(b) the Welsh Ministers,(c) the Scottish Ministers, and(d) a Northern Ireland department.(4) The Secretary of State must lay before Parliament the memorandum of understanding, which must also set out—(a) how the agreed policy frameworks on the functioning of the internal market in the United Kingdom will operate,(b) any agreed exclusions from the market access principles,(c) proposals for the establishment of a council or councils, comprising representatives of the Secretary of State, the Welsh Ministers, the Scottish Ministers, and a Northern Ireland department to oversee the operation of agreed policy frameworks and the functioning of the internal market in the United Kingdom, and(d) proposals for the establishment of an agreed dispute resolution mechanism relating to the internal market in the United Kingdom for any disputes among the Secretary of State, the Welsh Ministers, the Scottish Ministers, and a Northern Ireland department.(5) A statutory instrument containing regulations under section 56(3) may not appoint a day for the commencement of Parts 1, 2, 3 or 4 until the requirement in subsection (4) is met.”
My Lords, as I said in winding up at Second Reading, the eight hours of speeches broke the Bill down into three areas of serious concern: its illegality, its threat to the union, and its structural contradictions. As the noble Baroness, Lady Hayter, said, even if Part 5 is removed one way or another, there will still be great dangers lurking within the Bill. This amendment focuses squarely on putting the threat to devolution on ice.
The Minister was right when he said that the devolved authorities get new powers through the Bill, but these new powers are heavily constrained—more so than they were before when there was EU flexibility. We have heard some of this debate already. More importantly, both Ministers have omitted to mention that, at the same time, the Government are taking significant powers away. These losses are far more significant than any notional gains. This has already been correctly characterised by the devolved authorities as rolling back the devolution settlements.
The Governments of Wales and Scotland need only look over their respective borders to see how the UK Gossvernment are treating their regions and cities—where there is only piecemeal devolution—to conclude that taking power back to the centre is not an accident; it is a pattern of behaviour. As an aside, this is not a unique pattern of behaviour. My Scottish friends tell me that the Scottish Government are very enthusiastic about centralising power away from their local councils.
Returning to the Bill, we should not worry when it comes to Westminster’s reputation in Scotland. I read in the press that Michael Gove is heading up a new unit to tackle the secessionist movement in Scotland. What could go wrong there? Perhaps a better way of dealing with the unpopularity of Westminster is to deal with the central devolution issue in the Bill.
There are many later amendments concerning parts of the problem with the Bill. This amendment seeks to deal with it all in one go, taking it head on. It is driven by a central principle which we on these Benches share. We do not believe that it is only the UK Government or this Parliament that should dictate how the future internal market should work. It has to be a collaborative effort between Westminster, Edinburgh, Cardiff and Belfast. To achieve this, Parts 1 to 4 of the Bill need to be rewritten by consensus, not imposed, which is why this amendment seeks to halt the progress of Parts 1 to 4 until a joint process has created the future market structure. In essence, it will put on ice the Bill’s implementation until agreement is reached on the operation of the internal market frameworks.
In order to do this, the amendment rewrites the purpose of the Bill. What stays is the promotion of the continued functioning of the internal market for goods, in Part 1, and services, in Part 2. It includes the recognition of professional and other qualifications in the UK—in Part 3—by establishing the UK market access principles, including, as now, the mutual recognition and non-discrimination principles for goods and services. It adds the important rider that those principles have to be agreed in a memorandum by the Secretary of State, the Welsh and Scottish Ministers and a Northern Ireland department. This memorandum would cover how the agreed policy frameworks on the functioning of the internal market in the United Kingdom would operate and any agreed exclusions from market access principles. It would establish a council or councils, comprising representatives of the Secretary of State, the Welsh and Scottish Ministers and a Northern Ireland department to oversee the operation of the agreed policy frameworks and the functioning of the internal market in the United Kingdom. The current Joint Ministerial Council would need to be strengthened to achieve this objective.
The amendment would also establish an agreed dispute resolution mechanism, relating to the internal market of the United Kingdom. It requires the Secretary of State to lay this memorandum before Parliament. In short, this amendment makes the Government do what it should already have done. Amendment 4 requires them to consult and reach agreement with the devolved nations of the United Kingdom. By pausing and putting this on ice, Her Majesty’s Government can then create the consensus that is needed. It can also address the holes in the Bill, including the role of the common frameworks, which will be discussed in much more detail later, and it can put in place a process of dispute resolution. The deliberate absence of detail around dispute resolution can be viewed with great suspicion by those who are so minded. It seems that in the end, the Westminster-based UK Minister will decide disputes if the Bill remains unamended.
Why should the Government agree to this amendment? The first reason is due process. I met the noble Lord, Lord Callanan, on Friday. His key anxiety was about discipline and time in order to get through all this. If he were to accept this amendment, he would, at a stroke, remove large portions of the subsequent debate up to, but not including, Part 5 of this Bill. He would then meet his time objectives. Much more seriously, by accepting this amendment, the Government could step back from a truly appalling act of political vandalism. To say that this Bill drives a coach and horses through devolution is not hyperbole. This cynical approach to the balance of powers established between Westminster and Scotland, Wales and Northern Ireland, is calling down issues that, once started, will not easily be halted. This amendment seeks to avert this disaster, creating a role for the devolved authorities, including the operation of the internal market frameworks, robust dispute resolution, agreed exclusions from market access principles and representation for all four nations on oversight councils. I beg to move.
My Lords, I refer to my interests in the register as this is the first time I have had the honour of speaking in Committee. Amendment 4 introduces an expanded purpose for the Bill. The noble Lord, Lord Fox, has explained the rationale for his wide-ranging proposal. I can understand his wish to refer to services at this introductory point in the Bill, given that they comprise over 80% of GDP, and to professional and other qualifications, harmony on which is so important to the UK’s single market.
I accept that the changes to subsections (1) and (2) merit consideration. However, I am very uneasy about the proposed new subsections (3) and (4). I fear that they make this a wrecking clause. They give the devolved Administrations a veto over the way internal market arrangements will work, in addition to the substantial powers and money that they have already been given in the various devolution settlements and EU exit Bills. This is a recipe for the politics of national resentment, chaos and delay, at a time when we need rapid agreement on the new order so that the country can move forward and make the EU exit work, difficult though this may be.
Resources are already massively redistributed out of London and the south-east to other parts of the UK, with Scotland alone having a fiscal deficit of £15 billion—namely, a subsidy from richer England—according to a recent article by David Gauke, who served in the Treasury for seven years. We do not want yet another stand-off at this moment in time with the devolved nations, able to hold things up. There has been quite enough of such delay in the exit negotiation process, now more than four years long, I remind noble Lords.
Where I have more sympathy with the noble Lords, Lord Fox and Lord Purvis of Tweed, is on the fact that we need clarity now, before the Bill takes effect. Perhaps I can explain why by way of analogy.
When I was at Tesco, one of the key reasons for success was a clear understanding of who had responsibility for what and a readiness to accept the rules for the greater good. Procurement was done centrally by buyers, who could work with the supply chain, such as British food producers, understand their needs, strengths and innovations, agree a reasonable deal and ship goods to the stores in line with customer demand. When it came to other areas, such as who to hire as employees and how to schedule their hours, that was locally determined. The key was that everyone knew and accepted the division of labour because it contributed to the success of the whole. There was no council where everyone could waste hour after hour arguing the toss, as appears to be proposed in this amendment.
Let us have clear divisions and let us decide them now, not leave them for a great fight over a memorandum of understanding or yet more devolved government bodies backed up by dispute resolution. That is just an invitation to politically motivated folk to stop the country adjusting to the new norms and getting ahead with economic recovery and international ambition.
The proposals in the Bill are a good start, and, as noble Lords can see, I am uneasy about this particular amendment. I served for nearly three years as the single market Minister in the EU and for years as a British official negotiating in Brussels and Luxembourg, and the truth is that, subject to some minor subsidiarity, internal market rules for goods were set at the EU level in the interests of the efficient functioning of the market. By analogy, rules for the UK single market should be set at the UK level. EU services were less streamlined, but we all recognised that and wanted to bring about improvement, which was one of the main objectives of the UK presidency in 2017, but that never happened. I look forward to hearing from my noble friend the Minister, but I will take a lot of convincing that subsections (3) and (4) make sense.
My Lords, I fear I must disagree with the noble Baroness, Lady Neville-Rolfe. I support this amendment. The House will be aware of my approach as a devolutionist, and I will not repeat my general views. However, for my part, the key is subsections (3) and (4) of Amendment 4 on what should be contained in a very necessary and vital memorandum of understanding.
At Second Reading, I raised the divergence in understanding between the Welsh Government and Whitehall. The Welsh Government spelled out that they were losers from the Bill—their powers would be changed. There were two particular differences in understanding between HMG and the Welsh Government. First, they said that the Bill takes powers to spend money over the heads of devolved Ministers on devolved matters; and, secondly, that the Bill amends the Government of Wales Act to add the decision on and operation of state aid policy to the list of reserved powers. In the factual briefing on the Bill, the Government actually claim that they are increasing the powers of the devolved legislatures. Indeed, in the discussion on the previous amendment, the Minister claimed again that new powers were being given to the devolved legislatures. They cannot both be right. A recent meeting of Peers with the Welsh Secretary failed miserably to clarify the position. I now specifically ask for the Government to publish a reply to the Welsh Government’s document on their concerns about the Bill.
Subsection (3) is of the utmost importance. There must be a clear understanding of the need for the consent of the devolved legislatures in a memorandum of understanding before this House finishes with the Bill. I need not say much more than that we also need an important statement that Her Majesty’s Government have not wished, deliberately or by inadvertence, to undermine the unity of the United Kingdom, both by actions and words. I express my deep concern about this approach by the Government of going back on the devolution settlement, which has worked for many years now.
Certainly, the unhappiness of the Welsh Government is clearly expressed in their document. We should have—and I hope the Minister will be able to promise as much—a document setting out where they agree and disagree with the specific points made in the document which has been circulated.
We seem to have a technical problem.
[Inaudible]—needed at all, certainly at this stage. The earlier parts of the Bill, which deal with the establishment of new rules to maintain the internal market now that we have left the EU, have received much less publicity than Part 5. However, these parts are just as constitutionally significant because, under the cover of Brexit, the Government are attempting to slip through the unravelling of devolution. They have claimed that this Bill will increase the powers of the devolved Administrations, which is akin to President Trump claiming that the virus is waning in the USA: the facts demonstrate its falsity, as the clauses in this Bill demonstrate multiple ways in which it undermines current devolved powers.
The UK’s internal market appears to function perfectly well at the moment. The barriers cited by the Government as the reason for this Bill are hypothetical and unlikely to materialise because they are clearly against the interests of the devolved Administrations. There is no clamour to diverge from existing standards set by the EU because they are both high and universally recognised. Therefore, taking the Bill at face value, it seeks to solve a problem that does not exist, but that judgment is rather too kind because the details betray the Government’s real purpose.
Until now, devolution in the UK has functioned under the umbrella of EU legislation. Most of the fundamental devolved powers have operated in that way, and EU regulation has been accepted with noticeably little argument because it operates on such a large scale that there is little perception of party-political bias. The new arrangements set out in this Bill will be very different. Obviously, England will dominate, come what may, but the Government are not content with relying on size alone. This Bill steals all the remaining cards from the devolved nations.
We have a ragged devolution settlement—lopsided, confused, and already under huge strain. Leaving the EU has destabilised it further. Because there is no proper devolution in England, UK Government Ministers are effectively hybrid Ministers. One minute they are acting as Ministers for England and the next they are UK Ministers. Indeed, in some cases, such as agriculture, the Secretary of State is largely just the Minister for England, so it is essential that there is a strong dispute resolution mechanism: there will be problems if that fell back on the Secretary of State alone. This Bill itself will become a protected enactment, which devolved Administrations cannot repeal or modify. However, the UK Parliament will, in practice, be able to override the market access principles when legislating for England. Hence it will have an inherently asymmetrical effect.
Looking at how the market access principles will be enforced, we see a much tighter definition than allowed under EU law. It narrows the territorial scope of devolved legislation, which will no longer be able to apply to all activity within that nation. The Senedd could still vote to ban a wide range of single-use plastic items, for example, but that ban could no longer be applied to products entering Wales from the rest of the UK, nor could it ban sales of those goods. Such a ban would therefore be pretty meaningless. Amendment 4 applies the Government’s own market access principles, but with a framework of respect for the decisions and views of the devolved nations. With all due respect to the noble Baroness, Lady Neville-Rolfe, the UK is not a supermarket. The nations of the UK have individual and proud heritages and identities.
The Government’s regulatory impact assessment recognises that the broad application of the market access principles will limit the ability of the devolved Administrations to introduce distinct approaches to environmental and social policy, which will of course undermine the fundamental purpose of devolution. In the interests of centralisation of power, the Government are attacking innovation. The freedom provided by devolution has encouraged new approaches, such as plastic bag pricing, in Wales and minimum alcohol unit pricing in Scotland and Wales. There is an insidious pattern in many of the controls in the Bill. It allows the status quo to stand in some instances, but removes the right of devolved Administrations to change regulations in the future. This looks like the path to a stagnating economy.
Amendment 4 seeks to strengthen the hand of the devolved Administrations so that their voice can be heard. It replaces the very weak duty to consult with a much stronger principle of consent. That would force the Government to return to a normal approach of partnership and respect. The Bill scythes its way through devolved powers, and the amendment attempts to tackle some of that. The Government have lately reminded me of a drunk in a bar, who swaggers around aggressively challenging the other customers over imagined insults and picking unnecessary fights. This really is an unnecessary fight with the devolved Administrations. Devolution was always incomplete and uneven, and UK identity has been stretched pretty thin recently. Throughout the Bill there is a thread seeking to reverse devolution and recentralise the state, and this Government simply must not be allowed to get away with it.
My Lords, I want to comment on some of the issues raised by the amendment. It is useful in that, so far as this Bill is concerned, it draws attention to—if I may put it this way—the dog that did not bark. The dog in this case is the agreement reached at the Joint Ministerial Committee in October 2017, between the UK Government, the Scottish and Welsh Governments and the senior civil servant representing the Northern Ireland Executive, on the principles to guide the work on common frameworks. There will be an opportunity to debate in more detail how common frameworks intersect with the Bill’s provisions in the next group of amendments, but looking at the JMC principles is a good starting point.
In its report on the Bill, your Lordships’ Constitution Committee, of which I am a member, concluded:
“We consider that adhering to the principles agreed for formulating common frameworks would improve the likelihood of reaching agreement on how to progress the Bill. We are not convinced that the opportunities for managing the UK internal market through the common frameworks have been exhausted”.
The JMC principles embody what can reasonably be assumed to be core UK Government concerns: the effective functioning of the UK internal market; compliance with international obligations; the ability to negotiate, enter into and implement new trade and international agreements; the management of common resources; and cross-border justice and security. They also address those issues likely to be of most concern to the devolved Administrations: respect for the devolution settlements; devolved competence not normally adjusted without consent; and equivalent flexibility for local tailoring of policies as is afforded by current EU rules, as we have heard.
One of the witnesses from whom the Constitution Committee took evidence— Professor Nicola McEwen from Edinburgh University—contrasted the approach adopted for common frameworks, which she characterised as a co-operative and co-owned process, with the provisions of the Bill, which she described as more top-down. It is fair challenge to wonder whether a top-down approach might be necessary because one of the participants in the common frameworks negotiations is often seen as provocative and difficult to deal with, and of course committed to the break-up of the United Kingdom. The introduction this summer in the Scottish Parliament of a second continuity Bill, designed to give Scottish Ministers powers to maintain dynamic alignment with the EU, might well have been seen by the UK Government in this light. However, I would make three observations about this:
First, the Welsh Government, who, unlike the Scottish Government, gave their legislative consent to the European Union (Withdrawal) Act 2018, are a unionist Government but nevertheless as concerned as the Scottish Government about the implications of the internal market Bill for devolution. Secondly, we have now had eight of the statutory quarterly common frameworks reports from the UK Government mandated by the 2018 Act. Each has confirmed that common frameworks are making progress and that the Government have not felt the need to exercise their power to freeze devolved competence to counter any imminent risk of policy or regulatory divergence. Thirdly, even at a time when relations between the UK Government and the Scottish Government are at a low ebb, and the Scottish Government initially insisted that they would withhold legislative consent as a matter of principle for all Brexit-related Bills, the Scottish Government have in recent months recommended legislative consent—albeit with some qualifications—to the Fisheries, Agriculture and Trade Bills.
In conclusion, the amendment in the names of the noble Lords, Lord Fox and Lord Purvis, seeks to inject into the Bill the spirit of the JMC principles—here I am concerned more by its spirit than its precise terms—and to provide a more co-operative intergovernmental architecture for taking forward the UK internal market, which is currently missing from the Bill. I therefore hope that Ministers—despite the challenges, which I do not underestimate—will not give way to pessimism about the governance of the union, nor give up on a collaborative “four nations, one country” approach to protecting free trade within the UK. As such, I hope they will work constructively to address the concerns raised about the Bill during this debate.
My Lords, I am delighted to follow the noble Lord, Lord Dunlop. That was a thoughtful contribution, and I hope the Government will reflect on it, because it is in the interests of both the Government and the future of the United Kingdom that that kind of approach is thought through.
I speak in support of the amendment, which I contend is a constructive approach to maintaining trust in the existing devolution settlements, which are strained, and establishing a consensual way forward. I believe it is consistent with the report of this House’s Constitution Committee, which, along with others, has questioned the need for the Bill at all—a point that has been mentioned by a number of speakers. Very late in the day, it appears that some in this Government show signs of a growing awareness of the dangerous game they are playing with the devolution settlements and the implications for the future of the United Kingdom. The question arises why the Government are in such a hurry to get this through with totally inadequate consultation with business or the devolved Administrations. The Minister’s claims of business support during Second Reading was, frankly, extremely thin.
The devolved Administrations are, as has been said, opposed to the Bill as it stands, and amendments have been tabled on their behalf on a cross-party basis. When challenged as to why the powers in the Bill are needed, the Government’s responses are wholly unconvincing. From everything I have seen and heard, the Bill appears to be a solution looking for a problem. When Ministers airily suggest, for example, that Scotch whisky distillers may be prevented from buying malting barley from England, without any shred of evidence, they refer to different building standards, apparently in ignorance of the fact that Scotland has different standards that well predate devolution.
Given the flimsiness of the Government’s case and knowing what we do about the high-handed, centralising, cavalier approach of the Government, we are surely entitled to be suspicious about their intentions. After all, as the noble Lord, Lord Dunlop, pointed out, three years ago it was possible to set out in a communique the principles and approach behind the common frameworks process. The language is detailed and consensual. Specifically, the communique setting out the common frameworks describes the objective as enabling the function of the UK internal market while acknowledging policy divergence. It further stated that the devolution settlement should be respected and frameworks will
“be based on the established conventions and practices, including that the competence of the devolved institutions will not normally be adjusted without their consent.”
This approach and language are entirely missing from the Bill, so the question to the Minister is not only why the Bill is needed, but, even if that case can be made, why the hurry? More pertinently, having rejected letting common frameworks take all the strain, can the Minister explain why the eminently sensible and constructive approach of the common frameworks is not incorporated into the Bill, as I hope subsequent amendments will allow it to be? We will return to that.
That said, there remains a flaw in the common frameworks approach, which must be addressed and attached to the Bill if it goes forward, and it is identified in this amendment. It is that the devolved Administrations must be fully involved throughout the process and represented in the institutions that progress the frameworks. The proposals for the office for the internal market to be incorporated into the Competition and Markets Authority has been widely criticised. First, the CMA has a dedicated and reserved function, and there is no provision for the devolved Administrations to be represented, but they surely must be represented on the OIM or a better alternative.
As has again been commented on, so far, the common frameworks are progressing with all the appearance of a high degree of consensus and the dispute mechanism has not been called into play. It might be thought that, given the constructive, consensual approach to date, the likelihood is that if dispute resolution reached the apex, it would be accepted. However, it would not be satisfactory as it stands, and certainly not fit for purpose in relation to this Bill. The weakness is that as a dispute escalates, first to Ministers of the devolved Administrations, which includes UK Ministers acting for England, the final resolution lies with UK Ministers. The noble Baroness, Lady Neville-Rolfe, was concerned that the devolved Administrations might be the cause of delay, but I fear she underestimates the resentment of UK English Ministers overruling the devolved territories. That, I suspect, sadly helps explain the rather smug responses from UK Ministers: devolved Administrations may huff and puff, but UK Ministers can blow their houses down.
The Government have quoted examples from abroad to justify their approach but, ironically, they are mostly drawn from countries with properly established federal constitutions, notably Australia and Canada, where state and provincial governments’ views are fully involved in decision-making. In the case of Australia, a two-thirds qualified majority is required.
According to weekend reports, Michael Gove is establishing a unit to combat the SNP and its pressure for independence. I certainly believe that the largely unchallenged fantasy and lies which are fuelling the case for independence that would be so disruptive and damaging on a disastrous scale on top of Brexit and post-Covid recovery need to be challenged, but Mr Gove should have enlightened his colleagues that in its present form, the Bill will make his task almost impossible. Amendment 4 would greatly help him by delaying implementation of Parts 1 to 4 until an agreed approach is confirmed.
As the party with the deepest commitment of any to home rule—we battled for it for over a century—Liberal Democrats are determined to protect the devolution settlement against a centralising government in London and the separatist thrust of the SNP. Scotland’s best interests lie in using the powers that have been secured, ensuring they are not eroded and gaining a positive relationship with the other devolved Administrations and the UK Government. As we rebuild after a botched Brexit and a mishandled Covid-19 crisis, businesses do not need further disruption over constitutional arguments.
With the mechanisms in place and goodwill to seek the best for Scotland, the devolved territories and the UK, confidence can be restored. Ideally, the Government should abandon this Bill, which is at best premature and probably unnecessary but, so long as they push ahead, Liberal Democrats will push to secure this responsible and constructive amendment and save us from an unwanted and unnecessary constitutional crisis. Surely we have had enough disruption for one year—or even 10.
My Lords, it is a pleasure to follow my noble friend. Amendment 4 was ably moved by my noble friend Lord Fox, and I want to outline some further considerations based on principles and on practical considerations.
I start by reflecting on the important contribution of the noble Lord, Lord Dunlop. I first met the noble Lord when he was the adviser to Prime Minister David Cameron in Downing Street and I was chair of the cross-party Devo Plus group in Scotland, which was arguing for enhanced powers for the Scottish Parliament, which subsequently came into legislation with the Scotland Act 2016. The noble Lord considered our proposals carefully, he has been a very thoughtful contributor to our debates and I look forward to the conclusions of his review on intergovernmental relations. The fact that he has asked for a degree of pause on what could be considered a constitutional rush is important and should be taken seriously. If despite his wise counsel and the thrust of the amendment—which has been tabled sincerely—the Government insist on moving forward on their current trajectory and in their current manner, it will be the first time in a quarter of a century that a major constitutional change will have been imposed on the nations without any form of public or parliamentary consent. That will not serve the start of a new functioning internal market well. The principle of consent is therefore not a theoretical argument; it is important at the political level for those of us who believe strongly in the continued functioning of the United Kingdom and its internal market.
That is in stark contrast with the following groups that we will be considering, where, as the Minister has heard, the frameworks process has been good and we have supported it. The fact that it has been supported across all parties and, indeed, the nations is important.
I reflected on the point indicated by the noble Baroness, Lady Neville-Rolfe, which is that we need the Bill to prevent a veto by one of the nations. That argument would have some form of justification if we had seen that approach within the common frameworks. They cover the policy areas that are being repatriated: 154 of them, of which only four remain where there is not agreement whether they are reserved or devolved. Two of them will be resolved only after we know what is the agreement with the European Union, because they concern geographical indications and state aid—we don’t know what the Government’s proposals are for those two areas because we don’t know what the agreement with the European Union is. That will leave only two. For the 18 that require legislation, it is well under way to being proposed.
So it is not the case that there will be a major gap on the statute book at the beginning of January, and nor is it the case that any of the nations that are in receipt of these powers are seeking to exercise their veto. What those nations are asking, justifiably, is whether the powers being repatriated under the Bill—not the frameworks—are being constrained in a manner that is significantly different from how they were exercised under the single market in the European Union? These are justifiable concerns. So, with the greatest respect, I do not think that the point made by the noble Baroness, Lady Neville-Rolfe, holds any water at all.
It is of concern that in the first group the Minister was not able to categorically reinforce what has been referred to so far, which was the agreement made among the Ministers of Wales, Scotland and the United Kingdom and the representative from Northern Ireland of the principles of moving forward on the framework agreement. I hope that, when the Minister responds to this, he will be more clear in supporting that. If the approach of this amendment had been followed from the outset, I believe that we would have been able to secure consensus, because it would have been consistent with the manner in which we have been approaching it so far.
The point that my noble friend Lady Randerson indicated, which I thought was a very powerful one and which I hope the Minister is not only aware of but very sensitive to, is that this Bill, probably more than most, brings into stark reality the fact that we do not have a federal Government, which means that there are not designated Ministers for England on devolved areas for England. So we will continue to have UK Ministers who will be operating both at a UK level and effectively as Ministers for England. When it comes to areas of the functioning of the internal market, which is about the four nations, and then separately a consideration at the supra-United Kingdom level, the direct conflict of interest that exists in a Minister making the decision in the interests of England, and thus being the arbiter of the approach of Wales or Scotland as to whether they are in breach of the market principles, is a very valid concern.
We have already heard the example of a decision made on legislation in Scotland, the deposit return scheme, where the Minister himself said in the debate on the first group that, under the Bill, it could be disapplied unless UK Ministers decided that it could be within the principles. Now UK Ministers will decide on that. The Minister is shaking his head. If he is shaking his head, it is on the basis of agreement—which is my point. Consensus would be secured on agreement for that.
What is certainly the case—and the Minister cannot shake his head at this—is that the Bill states that decisions made for England by the UK Parliament cannot be bound by any successor UK Parliament. But if decisions made in Scotland or Wales are overridden by the UK Parliament, those parliaments themselves cannot subsequently legislate within those areas. That is why paragraph 88 of the Constitution Committee report asked the Government to
“explain why clause 6 treats legislation intended for England differently from that passed by the devolved legislatures.”
This is the reality—which is why there is justifiable concern. If there is such a concern, what is a better way of approaching it? A better way, as my noble friend Lord Fox and others indicated, would be to look to other countries.
Before I move on to outlining why I think we could look at international precedents, I would like to pick up a further point regarding dispute resolution. My noble friend Lord Fox and I met the Minister and the noble Lord, Lord True, and I am very grateful to the Minister for sending a long letter answering the points that we raised in the question that we asked about when these issues would inevitably arise in disputes. The Minister’s reply of 13 October was very interesting. He said that
“dispute resolution between Administrations will be managed through the appropriate intergovernmental relations fora and are interlinked with the outcomes of the review of intergovernmental relations which is due to conclude in the autumn. The Office for the Internal Market will have a role in providing independent advice in the dispute resolution process.”
But that begs two questions. The first is that, if we are awaiting the other intergovernmental fora working that is to be concluded, would it not make sense for that work then to be put in a memorandum of understanding that is very transparent and clear, rather than progressing this Bill first? Secondly, the role of the OIM in disputes is not clear in the Bill at all; in fact, my reading of the Bill is that the OIM will have no role in such disputes. The letter from the Minister says that it will have a role in providing independent advice in the dispute resolution process—but to whom, and on what? It puts the OIM in an incredibly invidious position if it itself is now an adviser in a dispute; it is basically a UK body advising on that dispute. That begs the question of why the Government are insisting on progressing at this pace.
I mentioned that we can look to other areas for other approaches. In the Second Reading debate I referenced Canada and Australia—and I am not alone, because the Prime Minister references those countries very frequently. Both countries in the 1990s introduced an approach for mutual recognition, but both Canada and Australia had had concerns from their states and provinces, which guard their legislative competences as conscientiously as Scotland, Wales and Northern Ireland do here.
But the approach of Australia in particular was different. The then Prime Minister announced in 1990 that the Australian Government would be seeking a mutual recognition approach for goods and services within Australia. At a special premiers’ conference in July 1991, state and territory Governments agreed in principle to enact a mutual recognition scheme for registered occupations and trade in goods. In May 1992 the heads of government signed an agreement to implement mutual recognition, and this was subsequently implemented progressively by Australian Governments in their states and territories between 1992 and 1995. Furthermore, the Commonwealth established a Commonwealth and state committee on regulatory reform to oversee the scheme.
In an approach so starkly different from this Government’s approach of having a reserved body, the CMA, to oversee the single market, the Australian committee comprised officials from each jurisdiction and, for example, was chaired for a period not by an appointee of the Commonwealth Government but by the director-general of the New South Wales Cabinet Office, which also provided the secretariat. This approach is closer to the principles of the framework approach but could not be further from the way of the UK Government. It is fair to assume that it would never even have crossed the mind of a UK Minister to allow a devolved Administration to have a chair and secretariat for a body to have consideration of the overall market.
The approach in Australia established ministerial councils comprising Ministers from each jurisdiction to oversee the mutual recognition scheme. They could also agree standards that could cover all of the country, while recognising local differences—again, similar to the framework approach that we have recognised as being positive. As my noble friend Lord Bruce indicated, a voting mechanism protected the interests of the countries and states but did not provide a mechanism where one state alone could veto any approach from another.
So the approach outlined in our amendment is not novel around the world; in fact, it is the approach of a Westminster system that a Commonwealth country has adopted. Crucially, it would also provide clarity on a mechanism to resolve disputes. It would provide a breathing space in the constitutional log-jam that exists at the moment that would prevent the start of an internal market system being imposed on two constituent parts of this Government.
I hope that the Government will reflect on this very carefully. I have indicated that we do not need this rush before the end of the year, and I have stressed the importance of having consensus on the way forward. Up until now, the Government have chosen not to go down this route, but it is not too late. I hope that they will reflect very carefully on this approach and that those on the Cross Benches and Labour Benches will work with us to ensure that there is a degree of consensus to allow the Government some space to change their course.
My Lords, I shall resist the temptation to follow the noble Lord, Lord Purvis, in what he has said. However, I reflect that in the other place I was responsible for, and chaired most of, the Maastricht Bill, with 500 amendments and 24 days of debate. Even there, I think that I would have been really stretched to have enabled what is labelled here as a new clause to be put into the purpose of Part 1 on an introductory basis.
I understand the feelings of Scotland, Wales and Northern Ireland. I had the privilege of being Parliamentary Private Secretary in Northern Ireland, and I was a local government leader. Of course they feel strongly, as I do about local authorities and the Covid situation. Nevertheless, it is quite clear that the purpose of Part 1 is
“the continued functioning of the internal market for goods in the United Kingdom by establishing the United Kingdom market access principles.”
It then lists what the mutual recognition and non-discrimination principles should be.
If the Opposition and those who do not like what is in Part 1 want to make a point, there is a case for having a small amendment including just the words “and services”. I see merit in that because, as I said earlier, that seems to have some validity, but to suggest in the introductory part, under “Purpose of Part 1”, that we have to await a statutory instrument
“containing regulations under section 56(3)”,
et cetera, is extraordinary. I cannot believe that there have ever been many Bills where that sort of new clause has been inserted into the introductory part.
Therefore, I say to my noble friend on the Front Bench that there are valid questions arising from this alleged new clause to be asked in the right place, but this is certainly not the right place in this Bill.
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.
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.
Regarding the question asked by the noble and learned Lord, Lord Morris, about spending power in Wales, the Government believe that reserving subsidy control is the best way to guarantee a single unified subsidy control regime which could be legislated for in the future and that meets the needs. A UK-wide subsidy control regime will ensure that subsidies do not unduly distort competition within the UK’s internal market. Importantly, this power is in addition to the devolved Administrations’ existing powers. We intend to work with them to ensure that this power is used to best effect, augmenting their existing powers to support citizens in Scotland, Wales and Northern Ireland. As always, we will address the Welsh Government’s concerns. My colleague Chloe Smith, the Minister for the Constitution and Devolution, met with Jeremy Miles AM on 13 October and has committed to further talks in due course. For all these reasons, the Government cannot support this amendment. I hope that the noble Lords, Lord Fox and Lord Purvis, can withdraw it.
I have received three requests to speak after the Minister: from the noble Lord, Lord Wigley, the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Purvis of Tweed.
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?
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?
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.
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.
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?
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.
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.
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.
Amendment 4 withdrawn.
Clause 1 agreed.
My Lords, we now come to the group beginning with Amendment 5. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or any other amendment in this group to a Division should make that clear in debate.
5: After Clause 1, insert the following new Clause—
“Common frameworks process
(1) The United Kingdom market access principles shall only apply to subjects within a description listed in Schedule (Common frameworks) when the common frameworks process in relation to that subject has been exhausted.(2) The common frameworks process is a means by a measure of regulatory consistency in relation to policy areas within devolved competence may be mutually agreed between the United Kingdom and devolved governments.”
My Lords, I wish to speak to Amendments 5, 11 and 53 in this group, which are in my name and, in the case of Amendment 5, that of the noble Lord, Lord Wigley. They are directed to an issue that, as we have heard, lies at the heart of the way the internal market is to operate in the best interests of all parts of the United Kingdom. The problem to which they and all the other amendments in this group are directed is this: how can the common frameworks programme fit in with the centrally driven market principles laid out in the Bill?
I must declare an interest in the common frameworks programme, as I am a member of the Common Frameworks Scrutiny Committee, chaired by the noble Baroness, Lady Andrews. For us, scrutiny of a number of these frameworks is already work in progress. So we are looking for an answer to that question, too, quite apart from the need to address it for the purposes of the Bill.
I shall introduce this subject as succinctly as I can, but the issue is one of fundamental importance to the devolved Administrations and to the future progress of the Bill, so I hope I shall be forgiven if I take some time to say what common frameworks are and why they matter. The common frameworks are a means by which the UK and the devolved Governments can agree on a measure of consistency across the United Kingdom for those policy areas returned to us from the EU that are within devolved competence. The process has been going on since the European Union (Withdrawal) Act 2018, which mandated it, was enacted. It is founded on the principles that were agreed by the JMC at its meeting in 2017, to which the noble Lord, Lord Dunlop, referred in the previous group.
To begin with, the UK Government identified 142 distinct areas that might need to be addressed. While we were within the EU, legal and regulatory consistency was maintained across the UK in these areas by EU law—but EU law does not insist on complete regulatory uniformity. The degree to which this has to be so depends on the nature of EU law in each given area. In some cases, minimum standards are set by EU law, leaving a measure of discretion to member states. In other areas, EU law is more prescriptive, leaving little room for variation. The devolved settlements were arrived at against that background. The key to their success is that they allowed for policy divergence within the UK in areas that were not reserved to Westminster.
The basic argument for the development of common frameworks after we left the EU was that, if they were not created, the potential for policy divergence within the UK would increase significantly once we left; but it was never the intention that they should eliminate policy variation within devolved competence. What they do is provide a means by which the parties to this arrangement can identify the potential negative effects of any proposed policy variation and then determine whether they are serious enough to require agreed constraints on devolved policy autonomy.
This system respects the devolution settlements and allows for different solutions across the nations, but controls them where necessary to make the internal market work. I can give an example: the section on divergence in the Nutrition Related Labelling, Composition and Standards Provisional Common Framework, which the committee chaired by the noble Baroness, Lady Andrews, was looking at last week, states:
“All four administrations have the ability to diverge from generally harmonised rules within their territory, where risk assessment shows this is both necessary and proportionate, to protect consumers … Where one nation wishes to diverge … they should first consult”
a policy group to
“identify whether a common approach can be achieved that meets the desired outcomes, but which ensures the functioning of the UK Internal Market, while acknowledging policy divergence.”
It is worth repeating the phrase
“which ensures the functioning the UK Internal Market, while acknowledging policy divergence.”
As in the case of others, there is a dispute resolution mechanism that can be invoked by any of the four nations if they cannot arrive at a common approach, although I have to say that I am not aware of any case where it has had to be invoked so far.
Common frameworks fall into two categories: legislative frameworks and non-legislative frameworks. Legislative frameworks are in areas where new primary legislation may be required, in whole or in part, to implement the common rules and ways of working alongside a non-legislative agreement. Non-legislative frameworks may include secondary legislation—for example, where changes are needed to retained EU law in order to implement the new framework.
However, both kinds have this feature in common: they are based around a framework agreement and concordat, neither of which are based on legislative arrangements; the process is voluntary. Of the 142 areas that were originally identified, 115 are thought not to require any framework and 22 are thought to require a non-legislative framework, leaving just 18 that would require a legislative framework to bring them into force. There is one other point to note. There are four policy areas that the UK Government believe are reserved, but this is disputed by the devolved Administrations. State aid is one of them. As these areas are disputed, it is very unlikely that common frameworks will be agreed in these areas.
That brings me to this Bill. No one doubts that there is a need for a measure that addresses the UK internal market as a whole. As the noble Lord, Lord True, said in his letter to all Peers of 21 October, common frameworks play an important role in the collaborative policy-making process. But, as in the case of the nutrition labelling example which I mentioned earlier, they tend for the most part to be policy specific. They cannot alone guarantee the integrity of the entire UK internal market. He said that they cannot be a substitute for this Bill. He made the same point when he was winding up the Second Reading debate. He said that 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.”
So far I entirely follow what he was saying, and I do not for a moment disagree with the need for legislation of some kind, at some stage, to address these problems. But it is the sentence that followed in his speech that reveals the crucial area of difference between us. He said that 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.”—[Official Report, 20/10/20; col. 1427.]
He referred in an earlier passage to the need for a coherent market structure without economic barriers that could block or inhibit trade in goods across the United Kingdom. Those sentences beg the question: how can any future common frameworks fit in with the overriding market principles described in this Bill? I stress the word “future” because, as has been referred to already in these debates, the Bill preserves existing arrangements—it does not seek to override them—but it is the future that matters to the devolved Administrations, and it is the future that is at stake.
The Bill does not provide a direct answer to these questions. There is no reference to the common frameworks anywhere. In short, it simply ignores them. But the effect on any policy differences that may be agreed to in the future, other than in the case of serious threats to human, animal or plant health of the kinds that are excluded by Schedule 1, is plain to see. They must give way to the mutual recognition principle. That is what seamless intra-UK trade across all sectors of the economy, without economic barriers, will amount to. The language speaks for itself. The Bill does not seek, as I have said, to repeal any of the relevant provisions in the legislation that defines devolved competence. But that, with that one exception, is its effect. The devolved Administrations simply cannot accept that. Their ability to diverge from generally harmonised rules within their territory in the carefully regulated way that the common frameworks provide for where risk assessment shows that this is both necessary and proportionate to protect consumers, is rendered worthless. I do not speak for any of the devolved Administrations, although I live in Scotland, but I have been involved in the devolution legislation from the very beginning. I therefore understand and sympathise with their concerns as to what this means and where it will lead to.
My amendments seek to protect the way that common frameworks respect and give effect to the devolution settlement. Amendment 5, read with the proposed new schedule in Amendment 53, does two things. It seeks to provide a definition of what the common frameworks process is, and it seeks to exclude the common frameworks process in the relevant policy areas from the operation of the mutual recognition principle. Amendment 11 proposes a different form of words to achieve the same result. It seeks to exclude a manner of sale requirement from the scope of the mutual recognition principle if it gives effect to an agreement which has been the subject of a common framework. I have kept these amendments deliberately very short so as not to disturb the architecture of the Bill, and I have introduced them into Part 1 so as to focus this key issue as early in our debates as possible. But I do not claim a monopoly of wisdom in the matter of how these amendments should be phrased. The noble Lords, Lord Hain and Lord Foulkes, and the noble and learned Lord, Lord Mackay of Clashfern, are proposing alternative ways of addressing the same problem which they will be speaking to later in this group. I am sure that if the Minister was able to accept the principle that lies behind all these amendments, an acceptable drafting solution that does not disturb the overall architecture of the Bill would be found.
I have had the advantage of attending three meetings which the noble Lord, Lord Callanan, with his usual courtesy, has been kind enough to host so that we could discuss this issue. I did not detect any inclination on his part to move in my direction, but it did seem to me that some of the arguments in favour of his were untenable. It was said that, as the common frameworks process was not created by legislation, they should not be handled in a legislative way. This meant that they should be kept outside the Bill. But my amendments would not alter the way that the common frameworks are handled in any way. All my amendments seek to do is to provide them with the protection that they need as simply as possible. Merely to provide a definition—and an amendment seeks to do that—does not undermine the process and the handling of it in a non-legislative way. Then it was said that the mutual recognition principle will still allow for flexibility and divergence—and the following phrase is important—so long as no new barriers to trade are introduced. A great deal hangs on that word “new”, to which I hope the Minister will direct his close attention. The argument fails to meet the point that a devolved Administration would be unable to enforce its policy choices, as regards the use of new kinds of non-biodegradable plastic packaging for example, if traders coming from other parts of the UK could simply ignore them, relying on the mutual recognition principle. I detected also a fear that barriers to trade across borders would be erected as regards high-volume goods such as barley, whisky, seed potatoes and lamb. I suggest that fears of that kind are exaggerated and unfounded. Erecting barriers of that kind would be in nobody’s interest. In any event, the frameworks system is carefully crafted. It depends on the agreement of all four nations, and there is a disputes resolution system should anyone feel that what is being proposed is unreasonable.
The outstanding virtue of the common frameworks process is the carefully nuanced way in which it addresses each issue while respecting the devolution settlements. The solutions that it can produce by agreement between all the nations should not be inhibited or neutralised by this Bill. My amendments are designed to do no more than is necessary to achieve that important aim. I beg to move.
My Lords, I support almost all the amendments in this group—particularly those tabled and introduced with such great clarity by my noble and learned friend Lord Hope—because they all tend in the same direction: to narrow the focus of the Bill on to areas where agreement cannot be reached with the devolved Governments, on ways of managing the tension between safeguarding the internal market and safeguarding the rights of the devolved institutions to take measures they have been elected to take. I shall address these issues myself later in the debate.
My role in this group is more specific: to explain why I believe that Clause 51 should not stand part of the Bill. Clause 51, regrettably, reflects the general powers of the Bill—powers which are sweeping in the Bill’s attack on the very nature of devolution. The clause would make the whole of the Bill a “protected enactment”. In other words, it would prevent a devolved legislature amending any part of the legislation as it applies in a devolved nation, even if that change would otherwise be within devolved competence.
There is precedent for that, but those precedents reflect the fact that such protection should be applied only to legislation of fundamental importance to the constitution or to human rights. Currently, only the Human Rights Act, the Civil Contingencies Act and the soon to be revoked European Communities Act are protected in their entirety. Even in the case of the European Union (Withdrawal) Act, the Government undertook a clause-by-clause analysis of the Bill to set out the case why some clauses, but not every clause, should be protected. Not only is this Bill clearly not of an equivalent weight to those that I have named; the Explanatory Memorandum even claims that this is an economic Bill, not a constitutional one. That is worryingly inconsistent. If the Bill is not constitutional, there is no justification for making any part of it a protected enactment.
I therefore ask the Minister to explain why each and every clause in the Bill should be protected. Can he please explain why the Bill shows indifference to the whole edifice of devolved government? This House needs a clause-by-clause analysis and explanation of the Bill. That is what happened with the European Union (Withdrawal) Bill, as it then was. Now we need a sound justification, before Report, for the rationale behind the Government’s asking Parliament to pass legislation that requires it to be protected in its entirety, and an explanation of the adverse consequences that would result if it is not protected when it becomes an Act of Parliament.
My Lords, it is always somewhat intimidating to follow an introduction such as the one we have just heard from the noble and learned Lord, Lord Hope. I think I heard him correctly when he said at one point that he did not have a monopoly of wisdom. That was the only bit of his speech that I really disagreed with.
As we heard from the noble and learned Lord and from the noble Baroness, Lady Finlay, we need a mechanism to ensure that the common frameworks are at the start of the process before market access principles are applied. How exactly that can be finessed between the menu of options we have in front of us, with these and other amendments today, can be a question for discussion—as indeed the noble and learned Lord, Lord Hope, indicated. But, essentially, the role of the common frameworks undoubtedly needs a statutory basis. The consensual mode of working that we have seen via the common frameworks surely has to take priority over other modes of rule setting, and a failure-to-agree process—which must be exhausted before other action is taken—needs to be in the Bill, as it is in the common frameworks mechanism.
Like other Members of your Lordships’ House, I was involved in the work of the European Parliament. I was a party functionary rather than an elected Member. Through that I witnessed the discussions, arguments, concessions, joint working, co-determination, consultation, redrafting and mutual respect that went into the emergence of EU regulations. There was no simple imposition by one all-powerful body. Negotiation and agreement were needed between the European Council, the Commission and the European Parliament for action to be taken. As the noble Lord, Lord Inglewood, mentioned, some really big decisions were referred to the IGC—the Intergovernmental Conference. It was a way of working that produced outcomes to which everyone could sign up. Now, consensus building might have taken time; there was the odd time when clocks were stopped at midnight, which we may have to do again today, but the position reached each time meant that all the parties involved could live with the resulting decision.
My view—and I think the view of all of us—is that the internal market process ought to be replicating, albeit on a smaller and much easier scale, those sorts of international and intranational methods that allow for joint working and consensus building as the prime route for decision-making. Of course, some issues will prove not to be amenable to consensus—this too was mentioned earlier—in which case there has to be an agreed adjudication and decision-making mechanism in place, but with the common frameworks procedures exhausted before any of that has to be set in train.
I turn to Clause 51, which has just been mentioned by the noble Baroness, Lady Finlay. This is understandably of major concern to the devolved legislatures and their Governments. In three quite simple, short subsections it amends the Scotland Act 1988, the Government of Wales Act 2006 and the Northern Ireland Act 1998—and all without a word of warning, far less the agreement of any of those elected authorities whose established settlements it undermines. Few of us expected to read a clause like that, dropped into a Bill on a quite different subject, which would blatantly amend these long-developed settlements.
We heard from the noble Lord, Lord Dunlop, in the previous group and we will hear from him shortly in this group. I hope he will not mind if I quote from what he said at Second Reading. He said:
“Devolution is now integral to the UK’s constitutional arrangements. At a time … when it has never been more important for central and devolved Governments to work together … to risk destabilising those arrangements seems careless, to say the least.”
He went on to ask whether
“we want our country’s future to be all about endless intergovernmental competition and conflict or about co-operation and confidence”.
His preference, of course, was for
“a modern, thriving, forward-thinking and inclusive UK union … to look and feel like a joint endeavour”.—[Official Report, 19/10/20; col. 1336.]
That is what this group of amendments is seeking to achieve, but it is not where the Government are going at present. They seem to be thinking of asking us to pass this Bill without legislative consent from the very authorities whose powers are being diminished. I cannot believe that the Minister wants such an outcome, but how seriously does he take this? Is he really happy to completely override the Sewel convention, set aside the success of the common frameworks process and challenge the devolution settlements that have served us so well for so long?
My Lords, I will speak to the amendment to Clause 51 in the name of the noble Baroness, Lady Finlay of Llandaff, to which I have added my name. The amendment opposes this clause standing part of the Bill. In a Bill that stands accused of breaching international law and impacting on devolution settlements, this clause is probably one of the most harmful, in the power that it hands to Ministers, and through them the Executive, to make regulations.
As the Explanatory Memorandum explains, regulations made by Ministers under these powers are to be made by statutory instrument and may be used to amend, repeal or modify the effect of legislation, including Acts of Parliament, which of course include the Government of Wales Act 2006—and, as the noble Baroness, Lady Hayter, has just pointed out, all without consultation with the devolved Administrations.
However, the prime function of this clause, and the whole of Part 7, is to ensure that all clauses of this Bill become protected enactments. It neuters the powers of the devolved legislatures, ensuring that they are unable to put forward Acts in their own Parliaments, in their own areas of devolved competence, to modify this Bill if or when it becomes an Act. This is almost unprecedented. The noble Baroness, Lady Finlay, has already told us that, since devolution, the only other examples of protected enactments covering all sections of an Act are the Human Rights Act and the Civil Contingencies Act.
Even in the case of the withdrawal agreement Bill, which was initially intended as a protected enactment, the UK Government produced a clause-by-clause analysis justifying protected enactment status, which eventually resulted in only a few clauses being protected. Why is this approach not applicable to this Bill? The Welsh Government have asked for a clause-by-clause discussion of why each clause should be protected. I would be grateful if the Minister could outline the Government’s response to this request.
Up to now, the Government have not produced any detailed justification of why protected enactment status is necessary, which exemplifies their cavalier attitude to devolution in general. In Wales this is seen as an assault on our devolution settlement, heralding the return of direct rule from England.
We are faced here with another example, as with the Covid-19 response in England, of Whitehall insisting on managing from the centre rather than understanding and empowering local decision-making. The powers of our devolved legislatures and regional mayors, although limited, seem to be resented and distrusted by the Government, and the automatic response seems to be to claw back control to the centre. My fear is that this Government’s unthinking, knee-jerk reactions all add to the perception that the union is not working for the devolved nations and, as I have said in previous contributions, this is encouraging an increasing percentage of people in Wales to conclude that the future lies in independence.
My colleagues and I on these Liberal Democrat Benches want to see true devolution of power to all four nations, including England, in a federal UK where each nation is equal to the other and treated with equal respect. For our party, the union is important because, as federalists we know, that without a union, federalism cannot exist, but we also know, that without federalism, this union will not exist into the future.
Clause 51 is truly indicative of the UK Government’s attitude towards the devolved parliaments and their powers and the desperate need they seem to have to curtail those powers by a show of strength. It is vital to the devolved nations that this clause does not stand part of this Bill, and if the noble Baroness is minded to reintroduce a similar amendment on Report, she will again have my support.
My Lords, I am a very strong supporter of the common framework system, explained so well by my noble and learned friend Lord Hope. One of the defects I find in this successful system, which I think was a very good invention at the conclusion of the withdrawal agreement Bill when it was set up, is that it is without formal parliamentary recognition. I do not know with any degree of completeness what sort of results it already has, except in the reports produced in accordance with the statutory requirement. One does not know the exact detail of the decisions made. I hoped that as the principles went along in the common frameworks procedure, the principles to be set up in the Bill for the internal market in the UK would become evident. However, so far, that has not been fully revealed in Parliament. I am very anxious that some form of recognition in Parliament of decisions taken and agreed should be set up. This is the purpose of the new clause that I propose in Amendment 170. I do not stand closely on the wording, but some recognition of what is happening in Parliament and ensuring that it is regarded as part of the law would be a useful addition to the present procedure.
The situation between the devolved Administrations and an internal market was regulated by the European Union, therefore some form of renewal of that may be required. I notice that the Scottish Government have said they would not introduce any changes that would damage the internal market, pending legislation. Of course, that is only on the basis that legislation would be something to which they were able to agree. I am very anxious that the results of what we do now should not damage the arrangements for devolution in a way that would point towards independence.
My Lords, I am speaking in support of my Amendments 172 and 173, which, in two different ways, as the noble and learned Lord, Lord Hope, said, seek to achieve the same as his amendment. Like the noble and learned Lord, Lord Hope, I am a member the Common Frameworks Scrutiny Committee chaired by the noble Baroness, Lady Andrews, and I am pleased to be so. Also a member is the noble Lord, Lord Bruce of Bennachie, who spoke earlier on Amendment 4. He described it as a consensus amendment. I wondered—if it was a consensus amendment—why he did not seek a consensus within the House on it, but I discovered why when I opened my Scotsman this morning and saw the big story, which sought to imply, I think, that the Liberal Democrats were taking credit for opposing this Bill and not wanting others to get any credit for that, but he got the support of the SNP in doing so.
Like the noble Lord, Lord Bruce, I am a long-term supporter of devolution. As some here will recall, I campaigned for it in the 1960s and 1970s, when there were few supporters of it in the Labour Party—John P Mackintosh, Donald Dewar and myself were three of the few—there were even fewer in the Tory party and none in the SNP, who wanted then, as they do now, complete separation. When people are picking up arguments in the cause of the SNP, they should never forget that.
Devolution is different from the unitary state we had. I recall well when in Westminster we were dealing with education in Scotland, which was administratively devolved. That was one of the main arguments for devolution: to have legislative control over what was administrative devolution. Devolution is also totally different from separation, but the SNP now see devolution as a means to achieve their aim, as a slippery slope to independence, and that is something we must be wary about. To the noble Lord, Lord Cormack, who spoke in a debate earlier, I say that Westminster remains ultimately sovereign in relation to all matters, although, if it oversteps the mark and tries to do something unacceptable, there must be other consequences.
As others have said, unfortunately devolution was never followed through in England, and we are left with a difficult situation, difficult most of all for the UK Government who regularly try to act on behalf of England as well as their overall responsibility for the United Kingdom. We have seen that in stark perspective in the pandemic. It does not help when the noble Lord, Lord Inglewood, describes them as the English Government. Successful devolution needs understanding and co-operation between both levels. Incidentally, as some people tend now to forget, it was envisaged originally that powers might be transferred back to Westminster if experience has shown something could be dealt with more appropriately at that level.
What I find a bit alarming is how some colleagues—those who were not in favour of devolution before—now seem to believe that the devolved Administrations are always right. It reminds me of the zeal of the convert. There is no greater critic of the Tories than me—I think the noble Lord, Lord Callahan, the Minister, will confirm that. Incidentally, they are not always wrong, but, thankfully, they are not going to be in power forever here at Westminster, so we need to have a more long-term perspective. On this transfer of powers from the European Union, the SNP describes it as a power grab and the Tories describe it as a power surge. Neither is true or helpful.
Before our regrettable withdrawal from the EU, we accepted that all these powers were better dealt with for all of the United Kingdom—Scotland, Wales, Northern Ireland and England—at a European level because we were all part of a common market. Now, we continue to have a common market here in the United Kingdom, so it is sensible that as many of the transferred powers as possible should be dealt with on a common basis. However, it is my view—as it was that of the noble and learned Lord, Lord Hope, and others—that this is best done by agreement through a common framework procedure and by ensuring there is, as one of my amendments says, no regression or diminution of the standards that we take back from Europe. That is what my amendments seek to achieve in different ways.
It could be, as some noble Lords have said, that all four countries have to agree or—the Minister might like to think about this—it may be appropriate to have a qualified majority, so that one Government could not block something useful by mischievous means.
Incidentally, there has been mention again today, from the noble Lord, Lord Purvis, of the threat to minimum alcohol pricing in Scotland. The Minister dealt with it well. It is, therefore, useful to recall that there was a challenge to minimum alcohol pricing, but it came from within Scotland, from the Scotch Whisky Association, based on it breaking European Union law. Interestingly, the ruling was that it did not break European Union law, and it was the United Kingdom Supreme Court that made that ruling. It is important that we separate party politics, which is not easy for us party politicians, and look at what is best for consumers and the public in general. That may be that things are decided at the UK level, or by Wales, Northern Ireland and Scotland separately.
We will soon need to sort out the English democratic deficit, which is real for the people in England and the regions in particular. We need to make devolution complete with a scheme for England, then the United Kingdom Parliament can properly carry out its federal role, maybe with a somewhat different role for the second Chamber.
Meanwhile I, like the noble and learned Lord, Lord Hope, hope that the common frameworks procedure sets a good co-operative working example. It is a better way than the Bill. I say to the Minister—I have not disagreed with him on everything—that it is a better way of dealing with this than the Bill in its current form, as the noble and learned Lord, Lord Hope, rightly said in his introduction. I hope the Minister will accept the general principle of these amendments, before we return to the Bill on Report. It would certainly make his life a great deal easier.
My Lords, it is a pleasure to follow my noble friend, with whose speech I completely agree. I speak to Amendment 175, which is also in the names of the noble Baronesses, Lady Altmann, Lady Suttie and Lady Ritchie. It ensures that no regulations may be made under the ensuing Act affecting matters that were within the devolved competence of Scottish Ministers, Welsh Ministers or a Northern Ireland department prior to 31 January 2020, unless a common framework on the United Kingdom internal market or the relevant aspect of it has been agreed between the United Kingdom Government and the relevant devolved Administration or Administrations. In this respect, I agree with all the speeches so far, which began so eloquently and compellingly with the noble and learned Lord, Lord Hope.
Sadly, the Government believe that the best method to achieve their objectives in negotiations with an international partner is to stick out their metaphorical tongue and say that, if they do not cave in, they will tear up an agreement made less than a year ago, even when Britain has more to lose than the EU if there is no agreement. Despite the Sewel convention that the UK Parliament
“will not normally legislate with regard to devolved matters without the consent”
of the devolved legislatures, the Government chose to ignore that all three devolved legislatures denied consent to the EU (Withdrawal Agreement) Bill. I suppose we should not be surprised that, when it comes to the devolved nations of these islands, the Government seem to believe that they hold all the cards and have nothing to lose—apart from, perhaps, destroying the United Kingdom once and for all.
The Government claimed, in their White Paper published in July 2020, that the proposals for the UK internal market would provide frictionless trade, fair competition and protection for businesses and consumers in the UK. However, as pointed out by the think tank UK in a Changing Europe, there is no urgency to introduce such internal market rules because all parts of the UK have been within the integrated EU single market for decades; we have all been together.
The provisions of the Bill are highly controversial. Those in relation to the Northern Ireland protocol have provoked legal action by the European Union and could yet undermine the basis for an EU-UK trade deal. Others cut into the ability of the devolved Governments in Scotland and Wales to regulate economic activity. Not surprisingly, the Scottish Parliament has voted against consent to the Bill, which it said
“constrains the competence of the Scottish Parliament and breaches international law.”
The Welsh Government have recommended that the Senedd follows suit.
So far as Northern Ireland is concerned, what is finally agreed—or not—at a UK-EU level will have far more impact on Northern Ireland’s trade with the rest of the UK than will this Bill. That is because the powers of the Northern Ireland Assembly are already constrained by the Ireland/Northern Ireland protocol, under which Northern Ireland will continue to follow the same EU rules on goods and on customs that it follows now.
For this reason, the market access principles set out in the Bill will not deliver unhindered trade within the UK, as Brexit itself will introduce such friction. After 31 January, the greater Great Britain’s divergence from EU rules in a race to the bottom, the greater the friction on the movement of goods from Great Britain into Northern Ireland, as goods will not be allowed into Northern Ireland unless they meet EU standards. There will also be an impact in the other direction, as lower standards in Great Britain would put Northern Ireland goods at a competitive disadvantage.
These market access measures in the Bill therefore appear to be a power grab against the devolved authorities, especially those of Scotland and Wales. This is because the provisions of the Bill will narrow the territorial scope of devolved legislation, which will apply only to goods produced in that territory, not to those imported from other parts of the UK. The Bill includes a much more restricted set of public policy justifications for exemptions from the market access principles than is permitted under EU law. This, as acknowledged in the business department’s impact assessment of the internal market White Paper, will curtail the ability of the Scottish and Welsh Governments to introduce targeted measures, for example, for social and environmental objectives.
Without the protection of these amendments, therefore, the market access principles will significantly undermine the ability of the devolved Administrations to address their own local needs or political preferences, which is surely the whole purpose of devolution. The Welsh Government have confirmed:
“The Bill automatically applies market access principles without requiring intergovernmental agreements, which will effectively nullify/override Welsh rules on product standards, environmental standards and professional qualifications.”
Referring to “this unnecessary Bill”, the Scottish Government called it an “unprecedented threat” to the Scottish Parliament’s powers. For example, if lower food and environmental standards were allowed elsewhere in the UK, Scotland would be forced to accept them. They also noted that, under the proposals, the UK would take over key devolved spending powers and
“the devolved policy of state aid”.
As for Northern Ireland, the UK Government have ignored a Motion passed by the Assembly in June, calling for an extension to the transition period. Matthew O’Toole, a Member of the Northern Ireland Assembly for the SDLP, has said that the Bill may go down in history
“as one of the most disreputable and damaging pieces of legislation ever proposed at Westminster”
on the grounds that
“it jeopardises all the protections against a hardened border between the north and south”
and that it has undermined trust in one of the signatory parties to the Good Friday agreement.
In 2017, despite deep differences on Brexit, the UK and the devolved Governments announced that they had agreed the principles that would guide the development of common frameworks to set out a common UK or GB approach, and to managing the internal market. The UK Government reiterated their commitment to respect the devolution settlements. Common frameworks are not mentioned in the Bill and it is unclear whether regulatory rules established through the common frameworks process would be subject to the market access principles. For example, the Nutrition Related Labelling, Composition and Standards Provisional Common Framework, published on 9 October, notes
“The framework arrangements within this framework will also link into any future arrangements for the UK Internal Market.”
However, that does not provide any clarity on how the two will be linked. This programme, which admittedly is as yet a largely subterranean creature with little visibility to your Lordships’ House, has made good progress. It is true that not all will have completed the process by the end of the transition period, largely thanks to the disastrous negotiation strategy of the Government which led to two abortive sets of no-deal preparations. However, I understand that most if not all have been agreed on a provisional basis and that the devolved Governments have undertaken to fully respect them until they have been through legislative scrutiny.
Moreover, since all parts of the UK will inherit retained EU law, it is completely misleading to claim that there will somehow be a dangerous void in the statute book without this Bill. The only void there will be is where the UK Government want to leave one, notably on state aid policy. What there would be in the absence of this Bill is a restraint on the UK Government being able to tear up retained EU law on environmental standards, food standards, the mutual recognition of qualifications, and would de facto force the devolved Governments to follow suit. That is why this is so objectionable. If pressed, this Bill would undermine the good progress made in many of the areas where common frameworks are being developed, and it is not clear how the provisions of the Bill and the common frameworks could function alongside each other. I hope that the Minister will respond to that point.
I shall take just two examples. If this Parliament decided to permit English farmers to use certain antibiotics that are currently banned for treating animal disease, the sale of English products containing those antibiotics could not be prevented in Wales unless the Welsh Government could demonstrate an immediate threat to public health rather than the slow erosion of antimicrobial resistance. If Scotland wanted to introduce a new requirement for headteachers to obtain a specialist qualification in identifying and dealing with mental health issues in young people, the Scottish Government would struggle to prevent an English or Welsh teacher without that specialist qualification being appointed to a headteacher post in Scotland. For this reason, I wholly endorse the other Cross-Bench amendments suggested by the Welsh Government and tabled by the noble Baroness, Lady Finlay, and others, which would restrict the application of the so-called market access principles to areas where negotiations over common frameworks have broken down. This would give the Government every incentive to work with the devolved institutions to agree common frameworks and the chance to come back to this House and the other place if they believe that a devolved Government were attempting to wield a veto. Surely the way forward is to negotiate common framework agreements in all areas where the UK Government feel they have an interest, but which cover areas within devolved government competences. That is what the amendment seeks to achieve, and for the life of me, I cannot comprehend why the Government will not accept it. Perhaps the noble Lord the Minister will explain.
My Lords, I declare an interest as a member of the Common Frameworks Scrutiny Select Committee, ably chaired by the noble Baroness, Lady Andrews. The noble Lord, Lord Foulkes, and the noble and learned Lord, Lord Hope of Craighead, are also members of the committee. I am a signatory to Amendment 175 along with the noble Lord, Lord Hain, and the noble Baronesses, Lady Altmann and Lady Suttie. The specific purpose of the amendment, as ably demonstrated by the noble Lord, Lord Hain, is to state that no new UK regulations can be made affecting any area that devolved prior to Brexit, including any area with cross-border impacts, without a common framework agreement with the devolved Governments concerned.
As has already been explained, these amendments, particularly this one and others in this group, focus on the primacy of the common frameworks and the importance of devolution. In many instances, throughout this Bill, the Government seem intent on power grabs from devolution to bring power directly to Whitehall. Quite clearly, the aim of our Amendment 175 is to protect devolution. I can think of those special devolution arrangements in Northern Ireland—of which I was once a part as a member the Northern Ireland Assembly and also as a former Minister—that arose out of the Northern Ireland Act 1998 and as a consequence of the Good Friday Agreement. They were based around those interlocking sets of three relationships within Northern Ireland: between north and south on the island and east-west between Ireland and Britain, and the accompanying infrastructure arrangements. These were reflected in the Northern Ireland protocol, and in the Withdrawal Agreement that the Government now seem intent on scuppering through this UK Internal Market Bill.
Interestingly—as the noble and learned Lord, Lord Hope of Craighead, and others have referred to—this Bill does not contain common frameworks. I was at a recent briefing with others, such as the noble and learned Lord, Lord Hope. It was very well organised by the Minister and the noble Lord, Lord Callanan. It was attended by the Minister for the constitution, Chloe Smith. She indicated that the reason why the frameworks were not in the legislation is because they are not all legislative. I found that reason very odd, but also very hollow and flimsy. As the Centre on Constitutional Change has stated, common frameworks are not mentioned in the Bill and it is unclear whether regulatory rules established through the common frameworks process will be subject to the market access principles. This is an issue that has also been addressed by the Lords Constitution Committee and by a group of academics for the Centre on Constitutional Change in their paper entitled UK Internal Market Bill Devolution and the Union, which was published last week.
To go back to the Lords Constitution Committee, it states at point 15 in its conclusions that:
“The Government should explain why the Bill does not mention common frameworks and how it expects the arrangements for the UK internal market will relate to the common frameworks.”
It further states at point 16 that:
“The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective UK internal market. Such an approach would obviate the need for the Bill.”
Academics for the Centre on Constitutional Change who published their paper last week stated:
“By abstracting the internal market from these frameworks and pushing ahead unilaterally against opposition from the authorities in Scotland and Wales, the UK Government is putting the common frameworks approach at risk.”
They also state that the market access principles in the Bill weaken devolution, reduce divergence and risk undermining the objectives and principles that have guided frameworks discussions.
The market access principles within the Bill undermine devolution competences in two ways. The UK Internal Market Bill itself will become a protected enactment, which the devolved legislatures will be unable to repeal or modify—hence our Amendment 175.
The Bill also narrows the territorial scope of devolved legislation. Currently, devolved legislation applies to all relevant activity within the devolved territory. This will no longer be the case as a result of this Bill, if it is enacted. The effect of the market access principles would, therefore, significantly undermine the purpose of devolution, which was to enable the devolved nations and regions to legislate according to their own local needs and political preferences. While I am supporting and speaking to Amendment 175, I also support other amendments in this group because they clearly specify the importance of devolution and, above all, the common frameworks scheme.
My Lords, I have added my name to Amendment 175 in this group, led and excellently explained by the noble Lord, Lord Hain, and in the names of the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie. I also support Amendments 5, 11 and 53, so excellently moved and spoken to by the noble and learned Lord, Lord Hope, and others that seek similar objectives.
This is not a party-political matter. Our devolution settlement was originally pioneered by a Labour Government, then deepened and extended by the Conservatives—as explained by my noble friend Lord Dunlop—and clearly supported by the Liberal Democrats, giving the devolved Administrations additional powers. As other noble Lords have said, common frameworks are important and our existing carefully crafted settlements have kept our union united. Surely, a successful devolution of power cannot consist of dictating to the constituent nations what will happen, informing them what they have to agree to and then saying that they have been consulted, so all is agreed. This is how the measures in this Bill have clearly been perceived by the devolved Parliaments.
We are a federal nation, comprising four proud countries. Until now, our devolution settlement has allowed divergence, even on matters such as taxation, where Scotland has different tax rates. These divergences have been well accepted across the country and ensure clear powers for each of our constituent nations. I will ask my noble friend two questions. First, is he able to confirm that the Government respect and accept the devolution settlement, which has served our United Kingdom so well? Secondly, Amendment 75 and others in this group merely insert proposals to ensure that future regulations will be introduced with a consensual approach. Could my noble friend explain the Government’s objection to such a consensual approach?
My Lords, I have added my name to Amendment 175, which is, once again, a cross-party amendment, tabled by the noble Lord, Lord Hain—who very powerfully and comprehensively explained it in great detail—and the noble Baronesses, Lady Ritchie and Lady Altmann. In the debate on this group of amendments, as well as on the previous group, noble Lords from all sides of the House have acknowledged that the common framework process has been a positive one. Therefore, I shall concentrate my brief remarks on the Bill’s impact on the delivery of the common framework agreements, which play such an important role, not least in avoiding future disputes and building consensus.
The Bill has illustrated the very worst of a top-down No. 10 decision-making process, with little or no engagement with the devolved Administrations in advance of its publication and in spite of the very real impacts that it will have on every part of the United Kingdom. I would argue that this top-down approach almost always results in rushed and poorly thought-through legislation, which will almost inevitably lead to unnecessary disputes with the devolved Administrations. As the noble and learned Lord, Lord Hope, explained in his excellent and very comprehensive speech at the beginning of this debate, it is, frankly, extraordinary that common frameworks are omitted from the Bill.
In a report published earlier this month, the Institute for Government stated:
“This legislation will cut across many of the areas where common frameworks are due to be developed. It is not clear how the bill and the frameworks are intended to function alongside each other.”
This gives rise to a number of questions. Will the Minister clarify exactly how the common frameworks will be linked to future arrangements for the UK internal market? Does he accept that, as it stands, the Bill risks undermining the ongoing joint review of intergovernmental relations, including the development of common frameworks? Does he acknowledge that this process has been significantly further complicated by the introduction of this Bill?
As other noble Lords have said, the responses to Covid-19 have illustrated perhaps all too clearly the increasingly uncomfortable relationships and complexities that could arise between the nations and regions of the United Kingdom, if a clear set of guiding principles is not agreed between the four Administrations and within the regions of England. Added to this, the Government acknowledged in September that coronavirus has also resulted in a further delay to the publication of the remaining common frameworks.
The closer one examines the Bill, the harder it is to understand why it is in any way either helpful or necessary. I look forward to hearing the Minister’s explanation of how the Bill will help to deliver future common frameworks.
My Lords, I support the group of amendments tabled by the noble and learned Lord, Lord Hope. They address a central question: how does this Bill sit alongside the common frameworks process? Common frameworks are the process established to ensure that once the UK has left the EU’s legal orbit, policy and regulatory divergence does not damage the seamless operation of the UK’s domestic market. Unimpeded trade within the UK is something we all agree on.
The common frameworks process was initiated while I was still a Northern Ireland and Scotland Office Minister. The frameworks analysis informing it—the latest iteration of which was published only last month—provides a full assessment of the risk areas arising from EU powers flowing back directly from Brussels to Edinburgh, Cardiff and Belfast. As the noble and learned Lord, Lord Hope, explained, the latest analysis identifies 154 policy areas—115 are deemed to require no further action and 22 require a non-legislative framework, leaving just 18 identified as needing such a legislative framework. Examples in the latest analysis include food standards and labelling, mutual recognition of professional standards, the provision of services, and chemicals and pesticides. As an aside, I am even more confused about the position on pesticides than I was before. When winding up, perhaps the Minister could clarify whether chemicals and pesticides will be a legislative framework. I thought I heard my noble friend Lord Callanan say that it would be a voluntary agreement, from which the devolved Administrations could walk away.
So far as one can tell, this process of common frameworks is making progress—though more slowly than originally intended as a result of Covid. Seven will be in place by the end of the year with a joint commitment from all Governments to deliver the remainder during 2021.
In its detailed report on the Bill, the Constitution Committee concluded:
“The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective internal market.”
When responding to the Second Reading debate, my noble friend Lord True argued that common frameworks are insufficient because they are sector-specific and cannot guarantee the integrity of the entire market. In responding to this debate, I hope that my noble friend will take the opportunity to explain in greater detail the Government’s concerns and the rationale for the approach adopted in the Bill.
There are three specific points that I hope the Minister will address, relating to necessity, urgency and proportionality. First, on necessity, my noble friend Lord True said in his wind-up speech last week:
“The Bill ensures that areas without a common framework 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.”—[Official Report, 20/10/20; col. 1427.]
I am puzzled by this explanation, as my understanding has always been that the portfolio of legislative and non-legislative frameworks was intended to represent a comprehensive package for managing the identified risks of divergence arising from EU exit. As I have already mentioned, many of the areas identified to be covered by frameworks are cross-cutting, and not simply sectoral, such as public procurement, recognition of professional standards and the provision of services in general. Therefore, can the Minister be more specific in identifying what the issues are that the Government are so concerned about that fall in and around individual sectors, which have not already been identified in the common frameworks analysis?
Secondly, on urgency, I hope the Minister will explain why the Government are legislating in such haste. Yes, this is a major and important piece of economic legislation, but it is also a Bill with significant constitutional implications, not least for the stability of our devolution arrangements and the future of the union. This matters because there are important gaps in the scheme created by this Bill. For example, where in this scheme are the conclusions from the review of intergovernmental relations? When will the review be concluded and published, associated as it is with the work on common frameworks? How will the provisions of the Bill be enforced, and how will disputes between the UK Government and the devolved Administrations be managed?
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. It is worth reminding ourselves of its provisions. Ministers can make regulations to restrict the ability of devolved Administrations to change EU retained law for up to two years after our formal exit from the EU. Should they make such regulations, these could remain in force for up to a further five years, so by my reckoning to January 2027. Therefore, on the face of it, there is ample time for the Government to put in place—in co-operation with the devolved Administrations—the necessary protections in the form of common frameworks and the associated intergovernmental architecture to protect the seamless operation of the UK domestic market. In light of the existing legislative protections that are already in place, will the Minister explain the need to legislate on this accelerated timetable, which, as we have heard, has not allowed sufficient time for more than the most cursory consultation? On the subject of consultation, can the Minister confirm whether all the responses to the consultation have been published? If not, will he give a commitment today that they will all be published in full and in short order?
Thirdly, and finally, on proportionality, the Government may be motivated in bringing forward this Bill by Mr Rumsfeld’s famous “unknown unknowns”. Ministers may indeed be confident that a portfolio of common frameworks can do most of the job, but still want to put in place an insurance policy to cater for unforeseen circumstances or to have a mechanism for monitoring the cumulative effects of policy and regulatory differences, which on their own may be entirely harmless. That is fair enough, but if that is so, then is not the scheme in this Bill the wrong way around? Instead of effectively overriding from the outset the practical ability of devolved Administrations to regulate differently to reflect local priorities and to suit local circumstances—and in the process potentially compromising a core benefit of devolution—would it not have been preferable for the Bill to provide a safety net of last resort? Would that not provide a better balancing of the needs of free trade within the UK with the need to respect the roles and responsibilities of the devolved institutions? Would not this create better incentives for all parties to agree sooner rather than later the full package of common frameworks? We all agree with the aims of this Bill. However, I suspect the Government will need to do more to convince the House that the legislative scheme in the Bill is the best way to achieve those aims.
My Lords, it is a great pleasure to follow the noble Lord, Lord Dunlop, and indeed to agree with much of what he said. I support the amendments in the name of my noble and learned friend Lord Hope.
I should declare an interest as the chair of the Common Frameworks Scrutiny Committee. The House will judge that I have a formidable group of Peers to do the work, and we have heard from some of them this evening. It has been splendid to hear so much exposure given to common frameworks because, as many other noble Lords have said, the Bill is silent on them.
It is a particular pleasure for me personally to support these amendments because they are a model of clarity and common sense. They track the history and purpose of, and the co-operation involved in, the common frameworks in the context of our membership of and exit from Europe, holding firm to the principle and practice of devolution.
The Government are silent on the common frameworks and silent on the years of hard negotiation that has gone into them so far to ensure that the principles that govern them bear fruit. I am surprised at that silence because in everything that the Ministers have said so far—and they have said it informally in communications with us, which we very much welcome—they have insisted that they still support the principles of the common frameworks and their role in stabilising the internal market, yet in effect these clauses drive a stake through them.
As my noble and learned friend Lord Hope said, the common frameworks allow for reconciliation across an enormous range of highly sensitive areas of policy—from the safety of baby milk to protections relating to the location and storage of hazardous waste, to maintaining future emissions trading. It has been a slow and careful process because the dispute mechanisms and the legislative frameworks have to be resilient if the internal market is to work with integrity in the future.
As the noble Lord, Lord Dunlop, said, at Second Reading the Minister defended these clauses in the Bill on the grounds that this matter needs regulatory underpinning, because there are issues that fall around and in between the frameworks. First, as he also said, they are not entirely sector based, but the real puzzle for all of us is where these identifiable gaps are. If there are indeed gaps, could not other frameworks be developed as appropriate? We already have the models in front of us. Therefore, like the noble Lord, Lord Dunlop, I would be very interested if the Minister could now tell us in more detail what these issues are that fall around or between the individual sectors. What is the problem to be solved here?
The best clue that we have is that the Minister has suggested that the Bill is needed in case there are future developments that cut across seamless trade. Again, it is impossible to know what the Government think is likely to happen, why they cannot share that with us and why such developments cannot be accommodated. So far, no Minister and no officials, in formal and informal conversations, has come up with an instance of what this means.
It is the more frustrating because, by definition, the frameworks are dynamic. They will be under regular review—they are work in progress. If there is a push for further divergence, the reconciliation and dispute processes kick in. The union becomes the stronger because it acknowledges that culture, demography, local economics and geography drive diversity. If the Government fear that somehow, and at some point, unacceptable barriers to trade will be erected across the union, surely the frameworks are the solution and not the problem.
The Bill is important. It is also important not to exaggerate, but I believe that these clauses will exact an enormous price if they are not amended, as my noble and learned friend Lord Hope suggests. The mutual recognition principle becomes the default position, no matter what the devolved nations hope to achieve. The Government argue that, for example, we have the highest environmental standards in the world. Indeed, we might, but how can these be upheld in a highly competitive market where cheaper food invites cutting standards? How can each nation continue to drive down salt content in food if a cheaper product with a higher salt content becomes available for sale across the UK?
The amendments from the noble and learned Lord, Lord Hope, address all these points. They do not dismiss the clauses out of hand. They make it clear that there is a principle and a logical sequence to be followed if the Government are to achieve their own aims. They strengthen the status of the common framework process by bringing in the application of the mutual recognition process as a final resort, once the common frameworks and the dispute mechanisms built into them have run their course and failed. Clearly, at this point, something else may well be needed.
I suspect the Minister will argue that the Government do not want the common frameworks to have statutory force. These amendments do not give them extra statutory agency. They are not a threat to the Bill. They identify frameworks in the Bill but do not give them additional powers. They do not elevate them above the mutual recognition process, but merely define and clarify the process to be followed, and what happens if they were to fail. This is not pre-emptive. These amendments are a logical solution to the problem that the Government say might arise, even if Ministers cannot actually describe how it might happen.
I know that when noble Lords say that they are trying to be helpful, Ministers roll their eyes. But I put it to the Minister that so serious are the threats implicit in this Bill, and such is the anxiety that it has created, that these amendments offer a way forward that would meet the Government’s objectives and remove that anxiety. It would be a dignified way forward and I think it would command the support of the House. I look forward to the Minister’s response to the questions that have been asked around the House—and I look forward to him accepting these amendments.
My Lords, the noble Lords, Lord Naseby and Lord Cormack, have withdrawn. I therefore call the next speaker, the noble Lord, Lord Rooker.
I was attracted to speak to this group of amendments by Amendments 5, 11 and 53, in the name of the noble and learned Lord, Lord Hope of Craighead, and, as I have listened to the debate, I have begun to wonder even more why the Bill is required in the first place. At the risk of upsetting my good and noble friend Lord Foulkes—and I certainly do not want to get involved in Scottish internal politics; that is my caveat for what I am about to say—as a Minister in MAFF, Northern Ireland and Defra, and as chair of the Food Standards Agency, I worked very closely with several Ministers in the Scottish Government, and I always found them totally professional and focused on the issue at hand at the time.
Nobody has asked me to make a speech today on this matter, but I am going to raise matters raised by Food Standards Scotland in consultation in August and in the recent letter in October. The very reason the Food Standards Agency and Food Standards Scotland exist is to ensure that policy formation, regulation and enforcement in relation to protection of consumers’ interests are clearly separated from those responsible for food industry growth and promotion. Food Standards Scotland says the Bill blurs that distinction, which has been in place since the FSA was formed after the BSE crisis in the 1990s. Both the FSA and the FSS have a legal duty to
“protect public health from risks which may arise in connection with the consumption of food”.
That comes from the Food Standards Act 1999 and the Food Scotland Act 2015.
Only a few weeks ago, the UK Government confirmed in their report on the common frameworks that the powers they have to restrict devolved competence under Section 12 of the European Union (Withdrawal Agreement) Act—referred to by the noble Lord, Lord Dunlop—had not been used precisely because
“significant progress is being made across policy areas to establish common frameworks in collaboration with the devolved administrations.”
No party has ever expressed the need for, or provided evidence in support of, a statutory framework to regulate the UK internal market in the way that this Bill tries to do.
It is worth pointing out that the current internal market makes provision to allow the devolved Governments to impose conditions such as labelling and composition requirements or price mechanisms on food business operators in order to meet a public health objective, provided that the proposal meets an overriding public interest test. The Bill makes no equivalent provision and, indeed, makes clear that business cost is the primary driver, with no consideration of either public health costs or non-financial consumer interests and protection. The Bill does not advance the protection of consumers, other than in cost reduction. If consumer interest is defined solely by cost, it is inevitable that it will drive down standards, because lower standards are less costly.
I will briefly deploy three examples of existing responsible policy-making that is fully in line with current UK market issues and industry pressures. They are all evidence based, taking account of industry impacts as well as consumer interests. These three examples of why the present arrangements work were all given in August to the Business Secretary, Alok Sharma, by Food Standards Scotland—to which he has never responded.
The first is the fortification of flour with folic acid to improve pregnancies affected by neural tube defects. This policy has been advocated for some time by the Scientific Advisory Committee on Nutrition and I have raised it in your Lordships’ House on several occasions since November 2013. In the absence of UK Government action, Food Standards Scotland was asked by the Government there to carry out an assessment for Scottish Ministers. It did, and concluded that the nature of the UK market was such that all flour would require fortification and differentiation in product lines was not possible. Food Standards Scotland concluded that a separate Scottish solution should not be followed. UK-wide action is currently under consideration, of course.
The second example is the prohibition of the sale of raw drinking milk in Scotland. The original wide ban has been continued in Scotland, based on illness and deaths and the advice of the Advisory Committee on the Microbiological Safety of Food. Controls in England, Wales and Northern Ireland are less restrictive than in Scotland, so different rules apply. The current system works, and Food Standards Scotland is at a complete loss to understand why the Bill appears to save the existing unique provisions; it is clear that future provisions introduced on public health grounds are not protected. In other words, what will be saved now would not be protected if further provisions were introduced. The Government are making assertions that, without legislative underpinning, unnecessary regulatory barriers could emerge between different parts of the UK. The Government have given not a shred of evidence to support this assertion.
The third example concerns allergen information for consumers on “prepacked for direct sale” foods—that is a unique type of food. Working with Defra, the Food Standards Agency and Food Standards Scotland developed proposals to improve information following the tragic death of a teenager eating a baguette containing undeclared sesame seeds. Four options were considered as part of a UK-wide consultation. In short, option 4 was recommended as in the best interests of consumers, even though option 1 was the cheapest for industry. Under the Bill, if, for example, one of the bodies had opted for option 3—slightly less than option 4—the body that had chosen option 4 would have to go for option 3. Worse still, using the Competition and Markets Authority, it is likely that option 1, which was simply aimed at raising consumer confidence without regulation, would be chosen. It would be the cheapest for industry but the most unsafe for the consumer. These three examples of responsible policy-making show that the current common frameworks system should be used, and be shown to fail, before we move to the mutual recognition system outlined in Clause 2.
Finally, as was referred to earlier, diet conditions might in future require labelling of, for example, high fat and high sugar on public health grounds. This can work perfectly well under the current arrangements. Under the Bill, however, one part of the UK could be lobbied to reduce information on packaging which other parts would be required to follow. I cannot support the lowest common denominator; it is unsafe for consumers. I hope that, in due course, the noble and learned Lord, Lord Hope, will press his solution.
My Lords, I am delighted to speak to and support the amendments in this group. The debate demonstrates that it is not just Part 5 of the Bill that has created concern. In particular, I support Amendments 5, 11 and 53 in the name of the noble and learned Lord, Lord Hope of Craighead, and Amendment 170 in the name of my noble and learned friend Lord Mackay of Clashfern.
The House owes a great debt of service to the two noble and learned Lords for so clearly identifying the problems with the Bill and its complete oversight and omission of the common frameworks. In particular, they identify the problem of future common frameworks and their relationship to the Bill. But my concern is that, as there has not yet been agreement on the 18 common frameworks that may require legislative decisions, there may be some uncertainty. I note in passing that, of the 18, a large majority relate to issues being dealt with by Defra. They primarily concern agriculture, food and, to a certain extent, the environment, and that is a source of concern.
I express a concern over Schedule 1 and the impact on movements of animals and farm goods, in the event of threats to human, animal or plant health. The noble Baroness, Lady Andrews, referred to the default position appearing to be mutual recognition. Paragraph 2(2) of Schedule 1 refers to the “first condition” that would form an exclusion:
“the aim of the legislation is to prevent or reduce the movement of unsafe food or feed into the part of the United Kingdom in which the legislation applies … from another part of the United Kingdom”.
As the noble Lord, Lord Rooker, set out in some detail—I entirely endorse what he said—it is all very well when the Food Standards Agency in England and Food Standards Scotland take a similar view. I put to the Minister, for his reply when summing up the debate, my view that Schedule 1 indicates the need for common standards of human, animal and plant health to ensure free movement between England, Scotland, Wales and Northern Ireland. I thought that was the whole purpose of the Bill.
What will happen in future if the Food Standards Agency in England and Food Standards Scotland take different views on food, animal feed or a product from either state? Will Scottish produce be blocked from entering other parts of the United Kingdom, under Schedule 1 and other parts of the Bill? That would cause me great concern.
Finally, I endorse and support Amendment 170, in the name of my noble and learned friend Lord Mackay. He has identified the problem that there is simply no statutory basis for common frameworks. If so, would it not be better to have a common frameworks statutory basis to deal with all the problems that have been addressed during the debate?
My Lords, it seems that most of the noble Lords who have taken part in this debate have looked at the Bill through one end of a telescope, which focuses on the powers of the devolved Administrations and the threats or perceived threats to them. There is another end of the telescope you could use to look at the Bill, which shows that businesses in all parts of the UK need the certainty of knowing how they will be able to trade within the UK, going forward. That is important for those businesses trying to build a successful economy, particularly coming out of the Covid pandemic.
All the amendments in this group are motivated by a concern about the powers being transferred to the devolved Administrations. However, if those who are concerned flipped the telescope around and looked at things from a devolved Administration perspective, they would see that there are good things in this Bill that protect the economies of the devolved Administrations. Businesses, from whichever part of the UK, will want to continue trading with the rest of the UK. As I reminded the Committee earlier, 60% of Scottish exports, 61% of Welsh exports and 49% of Northern Ireland exports come into the rest of the UK. Therefore, using this end of the telescope, you can see that the businesses involved in trading these goods are looking for certainty to ensure that they know the basis on which they can go forward.
I have to say that I knew almost nothing about common frameworks before considering this Bill, and I certainly do not have the knowledge displayed by the members of the committee chaired by the noble Baroness, Lady Andrews. However, it is clear to me that not all those common frameworks are about the internal market; they cover other things too. A well-developed example is the storage of hazardous waste, which has nothing to do with the operation of the UK internal market; it covers a wider range of issues. Of course, such frameworks operate at the level of specifics, in very detailed areas. They do not give the overarching principles of market access that the Bill gives, which are mutual recognition and non-discrimination. However, I am puzzled by the relationship between the common frameworks and this Bill. I say to the Minister, I share the concern that many noble Lords have expressed in this debate: that no reference is made to those common frameworks. It is unclear to me whether the content of a common framework could override the mutual recognition requirements of non-discrimination. We need certainty; businesses need certainty in order to go forward.
If noble Lords and the devolved Administrations believe in the union, they ought to believe that we want an effective and efficient internal market within the UK. The issue should be, how best we can get that. For that reason, I support Clause 51, which ensures that this can continue to be a UK issue and cannot be overridden by the legislation in the devolved Administrations. We know that the Scottish Government do not believe in the union; they will find any way to undermine such a provision. I hope noble Lords will not let their version of grievance politics poison our approach to getting a sensible Bill on to the statute book to give the certainty that business needs.
My Lords, it is a pleasure to follow the noble Baroness, Lady Noakes, and for once find myself in agreement with much of what she said. In his winding-up speech at Second Reading, the Minister said:
“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.”—[Official Report, 20/10/20; col. 1426.]
The noble Lord, Lord Callanan, has repeated the same point today. Well yes, the devolved Administrations will be able to continue to regulate, but those regulations will become effectively meaningless if they can be undermined by unfettered market access from other parts of the United Kingdom. The Minister seems unwilling to address that simple point. Within the EU single market the devolved nations have enjoyed a level of discretion to diverge within a wider framework of agreed standards. Despite that divergence, our internal market has operated smoothly, and I do not think that many would argue otherwise.
Like it or not, devolution is a fact and we cannot and should not back-pedal on it. The Government recognised that in the frameworks agreement when they agreed that the common frameworks should
“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules”.
Can the Minister please confirm that the Government still stand by that agreement, in spirit as well as letter?
This Bill is a blunt instrument which effectively removes that flexibility for tailoring policies. What would be the point in, for example, the Welsh Government legislating against single-use plastics, if they are unable to block such items coming in from other parts of the UK; or of Scotland tightening labelling requirements, if goods sold in Scotland from other parts of the UK do not need to follow those requirements? Does the Minister seriously argue that those kinds of actions have created or would create significant barriers to internal trade?
The common frameworks programme, as we have heard, provides a simple solution that already exists. The programme is generally thought to have been a positive and consensual process to try to find the right balance. Indeed, as the revised frameworks analysis published by the Cabinet Office states:
“The cooperative approach on frameworks so far demonstrates the progress that can be achieved through proceeding collaboratively”.
As we have heard, however, the Bill as drafted ignores the common frameworks completely. There is not so much as a reference. The Minister said at Second Reading that the Bill does not make the common frameworks redundant, but it is very difficult to agree with that. As explained earlier, any divergence of regulation by a devolved Administration will be undermined by the precedence that this Bill gives to unfettered market access. I really do not see that that is an arguable point. It is the logical result of this Bill.
It is hard not to sympathise with the view of the devolved Administrations that the hard work and constructive engagement on trying to reach agreement on the common frameworks has effectively been torn up by this Bill. The Government cannot, in all honesty, be surprised that the devolved Administrations have rejected it. It is precisely this kind of heavy-handed, non-collaborative behaviour that is adding to the impetus towards the breaking up of our United Kingdom, which I am extremely worried about.
I said at Second Reading that I am not fully convinced that this Bill is actually necessary to achieve its stated aims. The Constitution Committee, and a number of noble Lords, has made the same point. However, I can see that there is some argument for the market access rules it creates, provided that they genuinely work alongside the common frameworks. However, for that to work without undermining them, the common frameworks must be recognised in the Bill, and any agreed permitted divergence from common standards allowed by the common frameworks must take precedence over the mutual recognition and non-discrimination principles of the Bill.
There are a number of ways to achieve that end, and the amendments in this group try to do this in different ways. I am particularly attracted by the approach taken by my noble and learned friend Lord Hope of Craighead in his Amendments 5, 11 and 53, and by Amendment 170, in the name of the noble and learned Lord, Lord Mackay of Clashfern. These seem to be a neat and simple way of recognising the common frameworks explicitly in the Bill and giving them precedence over the market access principles where appropriate, without undermining the Bill as it stands. I am also drawn to the introduction of the proportionality and subsidiarity principles in Amendment 2, which were discussed earlier.
I was heartened by the Minister’s commitment at Second Reading that the Government will
“study carefully the observations of your Lordships’ Select Committees on this part of the Bill”.—[Official Report, 20/10/20; col. 1427.]
Accepting these amendments, or something like them, would recognise that the internal market can work perfectly smoothly in a more nuanced, flexible and collaborative manner, just as it has in the past. That would show sensitivity to the legitimate and reasonable concerns of the devolved Administrations, and the respect for devolution that the noble Lord, Lord Callanan, referred to earlier today, without undermining the smooth-running internal market that we all want and which this Bill is intended to achieve. I would therefore urge strongly the Government to consider these amendments in a constructive light.
My Lords, it is a great pleasure and honour to be able to participate in this very important legislation. The search for common frameworks is something that has concerned me from the minute we went down the Brexit road. I would like to support the amendments that were put forward in the name of the noble and learned Lord, Lord Hope. I was also interested to hear the analysis by the noble Lord, Lord Vaux, of ways of solving problems.
It is very important that we go into this area in great detail. I congratulate the noble and learned Lord, Lord Hope, for bringing it in, in this way, this early in our discussion. What he gave us is a very fair and understanding analysis and I hope the Government will pay due attention to the issues that he outlined. We have also been privileged this evening to hear from four Members who have worked on the frameworks committee, and it is of course also very important to look at what they said. I was interested in the way that the noble Lord, Lord Foulkes, supported the issue from the Scottish point of view.
I would like to offer my support to Amendment 170, in the name of the noble and learned Lord, Lord Mackay, which he moved in his intervention. It is very important that agreements that are achieved are formally notified to Parliament, and that was the point he was making.
It is not a direct parallel, but noble Lords will probably remember that, on the introduction of the Scottish devolution Bill, the parties concerned when it was brought into practice in the Scottish Parliament found that they had to achieve a memorandum of understanding. One of the things that was contained in the memorandum of understanding was the Sewel convention. Here in Westminster, we received no details of what this memorandum of understanding contained. One was left wondering how some of the agreements were arrived at. This of course was rectified when we next looked at the Scottish devolution Act and the actual practice was brought in, in a legislative form, under that Act. We need to be kept fully up to date with the agreements that Governments come to. I support that amendment.
My Lords, I also am a member of the Common Frameworks Scrutiny Committee. I would like to give my appreciation to the noble Baroness, Lady Andrews, for the way in which she is chairing the committee. It has a hugely demanding task, which we are all learning extremely fast.
The noble and learned Lord, Lord Hope, is of course a member of that committee. The combination of his work and his expertise in the law has been demonstrated to be one of the strengths of the House today in the amendments that he has drafted, moved and explained in such meticulous detail. This is of huge benefit, and I hope that the Minister will recognise that he should give very serious consideration to what is being proposed.
I do not have the audacity to summarise the noble and learned Lord, other than to say that his basic questions were these: how do the frameworks fit into the Bill, and how will future arrangements be conducted if there is not a proper correlation between the frameworks and the Bill, and indeed the principles behind the frameworks? That is something that we have all been asking the Government to explain.
The noble Baroness, Lady Finlay, identified the tension between the devolved Administrations and the single market, but I think that most people who have had any exposure to the common frameworks process believe that it has been devised in a way that looks potentially like a very credible way of resolving that tension without removing it. It is recognised that there will be disputes which will have to be negotiated and that ultimately there will have to be dispute resolution, but the fundamentals are that it can be done constructively and with good will. Indeed, when the noble Baroness, Lady Hayter, told us about the negotiations she witnessed in the EU, she made the point that this was precisely how it was done, rather than some overriding super-body making the final decision—yet that is precisely what the Government appear to want to do through this Bill.
My noble friend Lady Humphreys is clearly concerned, first, about why this piece of legislation should be protected and the fact that it can and does amend the devolution settlements for Scotland and Wales, and gives the power to do so without any consultation with or reference to the devolved Administrations. This cannot be a respectful or constructive way forward. Ministers really do have to explain how they can justify that, and why they need those powers. The noble and learned Lord, Lord Mackay, said that he was a strong supporter of the common frameworks, and he demonstrated that, but he was concerned that they lack formal recognition, so his amendment seeks to ensure that.
This is a point that I made at Second Reading, and others have made. Given how well the principles behind the common frameworks have been developed, it is a real puzzle that those principles are not being incorporated into the approach to the UK internal market, and indeed why the common frameworks are not referenced in the Bill. The Government need to recognise the strong view that, without reference to the common frameworks in the Bill, there is a real suspicion that there is no proper link between what they are trying to achieve and what the common frameworks are working to do. The danger is that the common frameworks will be able to be set aside simply by the stroke of a ministerial pen in Whitehall.
I was going to say “my noble friend Lord Foulkes” —but perhaps he is my long-term sparring partner. The noble Lord would never have the temerity to take party-political credit for any initiative that he takes. However, I would remind him of my engagement—I am serious about this—in the Scottish Constitutional Convention, when Donald Dewar and I, along with others, worked very closely together to lay the foundations for what became the Scotland Act. That was done through quite robust debate, so I will say gently to the noble Lord, Lord Foulkes, that the Labour Party sometimes needs pushing, and I am not afraid to try to do that occasionally. Nevertheless, the noble Lord expressed sensible support for what is being proposed and identified specifically the case for perhaps considering some form of qualified majority voting as a mechanism for resolving disputes. That is something which I have incorporated into amendments and have spoken of on a number of occasions and to which, in the previous debate, my noble friend Lord Purvis referred, using the Australian example.
The amendment tabled by the noble Lord, Lord Hain, and the noble Baronesses, Lady Ritchie, Lady Altmann and Lady Suttie, effectively summarises the basic approach because, although that is in support of the Northern Ireland protocol and the protection of the Northern Ireland position, it is in fact designed to protect all of the devolution settlements by ensuring that the principle of consultation and consent is built into the legislation. That seems to be absolutely necessary. The noble Baroness, Lady Altmann, said in passing that we were a federal nation. I have to say to her that that is not the case. We are perhaps lurching towards that, and indeed I hope we are, because I think that that is ultimately the way that we will have to resolve these tensions. However, where we can call it quasi-federal is where we have developed a basis of consensus, consultation and engagement, which is being prejudiced by this Bill and the lack of clear explanation of or justification for the measures being taken by the Government.
The noble Lord, Lord Dunlop, gave us a thoughtful contribution. It is something I hope the Government will reflect on. He first made the very clear point, in detail, about how the common frameworks have gone from a huge range to a very small area where there might be some degree of tension. The question he put at the end was: what is the necessity for these measures? If the common frameworks were, when they were set up, supposed to be comprehensive, why, if there are gaps, can they not be used to fill those?
The second part of what he said was: why are we in such a hurry? Why such haste? And what is the risk of divergence? The devolved Administrations have all said they are not seeking that. The examples that have been given, whether on food or the barley issue, for that matter, have been resolved for the very simple reason that it is in everybody’s interest to resolve them. The barley producers of England want a market in Scotland; the whisky producers of Scotland want to access the widest range of top-quality malting barley competitively, and that is the whole point. The process resolves it, and only in a limited number of cases are there likely to be disputes. So the Government, as the noble Lord, Lord Dunlop, has said in the past, are using a sledgehammer to crack a nut, or have a solution looking for a problem.
The noble Baroness, Lady Andrews, also asked where the gaps were and, essentially, why not make the extension? That is something I think the committee she chairs is going to look at in more detail, at the same time as we look individually at each of the frameworks that are put in front of us.
The noble Lord, Lord Rooker, gave us good examples of areas of divergence and how they can be resolved and how the very process of going through them throws up the commonality that some things simply do not work on a devolved basis, and this drives people to find a solution. I have said to some of my SNP friends, who are agitating for independence, that the day after Scotland becomes independent, if that ever happens, England and the rest of the UK will still be there, and you will definitely need to have access to their markets and arrangements. You will still be negotiating and discussing, which probably explains why, regardless of the rhetoric, the Scottish, Welsh and Northern Ireland Governments have engaged very constructively in the common frameworks.
The noble Baroness, Lady Noakes, said that we should look through the other end of the telescope, but, in a sense, what I have just said makes the point that, yes, you can look at it from both sides; there is a huge driver to get agreement, but there are areas where there is also a very legitimate reason for divergence and an established process for allowing that divergence to happen. So the question you are left with is: why are the Government trying to take powers that do not appear to be necessary, urgent or proportional? This, again, was the point that the noble Lord, Lord Dunlop, was asking about.
The noble Lord, Lord Vaux, maintained the point that, effectively, the Bill could remove the very flexibility that has characterised the devolution settlement from this time and gave the current example of how the differences between the different Administrations about single-use plastics could surely be resolved in a way that does not require those that want higher standards to be forced to accept lower standards.
Ministers can protest all they like, but underneath all this is a concern that what is driving it are commercial pressures to get the cheapest, most cost-effective standards and force them across the whole of the UK, regardless of wishes. Nobody is suggesting obstructive blockages of the market are desirable, but, equally, overruling legitimate concerns is not desirable, either.
The noble Duke, the Duke of Montrose, identified the issue of the Sewel convention, which, I think, the noble and learned Lord, Lord Hope, suggested should become the “Sewel legal principle”, because it is the approach of not overruling the devolved Administrations.
So all these amendments are designed to get the Government to understand that the common frameworks are an effective mechanism that have all the ability to be used, and that if they are married to the right spirit of co-operation and good will and a dispute resolution, they can deliver what the Government want, but in ways that respect the devolution settlement and do not create, if I may say so, the grit in the oyster, which will produce not a pearl but, potentially, the break-up of the United Kingdom.
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.
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.
However, common frameworks by their nature are largely sector-specific, and I acknowledge the point made by my noble friend Lord Dunlop. They do not cover the totality of policy relating to the UK internal market. They cannot address interconnected issues or future areas of policy development. They do not cover business costs, for example. In response to the noble and learned Lord, Lord Hope, let me give an example of something that might arise in future: should one nation specify that a particular nutritional additive for flour produced or sold in that nation was required in all food products containing flour, without mutual recognition and this Bill, this would mean that any foodstuffs that had flour in them from any other part of the United Kingdom would also have to have this nutritional additive. This would increase costs to business and consumers and create unnecessary barriers to cross-border trade.
The principles behind the Bill consider overall costs. To provide adequate certainty for businesses and investors, the UK internal market must continue to function seamlessly. That is necessary and good for all parts of the United Kingdom, which is why we have the market access provisions in the Bill.
I was asked about Clause 51 standing part of the Bill, addressing the amendments before your Lordships. The noble Baronesses, Lady Finlay and Lady Humphreys, and others criticised Clause 51. It gives the United Kingdom Internal Market Bill protected or entrenched status, as has been said. This means that oversight of the internal market rules will remain with this Parliament. That ensures that the UK can operate a coherent internal market that maintains deep integration and strong economic ties between the four nations. In practice, this safeguards the internal market from different rules applying in different parts of the UK, which could risk creating barriers to trade. The Bill will grant us a level playing field from which all parts of the UK can build up.
The Bill inserts references into the Scotland Act, the Government of Wales Act and the Northern Ireland Act, so that the Scottish Parliament, the Welsh Parliament and the Northern Ireland Assembly may not pass legislation that amends the Bill or modifies its application. However, subsection (4) of this clause ensures that wide powers already on the statute book cannot be used to disapply the principles in the Bill. This applies equally to UK Ministers and Ministers in devolved Administrations and offers further protection and certainty for the way in which this legislation will operate. It touches all four parts of the pedestal. Our proposals will do nothing to prevent any Administration introducing rules and regulations for their own businesses operating with their own region, as long as these are not applied discriminatorily.
Amendment 171 from the noble and learned Lord, Lord Mackay of Clashfern, proposes that the JMC should be given the opportunity to agree all provisions under powers in the Bill or, in the event of disagreement, that Parliament should debate the provisions first. Unfortunately, and I understand where the noble and learned Lord is coming from—a place from which I hear a lot of anxiety in the House—there is an impression that there is no respect for the devolved Administrations, which is not the case.
However, the mechanism proposed is likely to be cumbersome: the Joint Ministerial Committee is not in continual session, there is no time limit in the amendment and it may lead to delay. We believe that it is unnecessary because where market-access provisions apply in areas beyond the scope of a common frameworks programme, the reformed intergovernmental relations structures—and I respond to those who referred to these earlier—and processes currently being jointly developed by all Administrations will provide strengthened vehicles for the devolved Administrations to engage with the UK Government. I assure the noble Baroness, Lady Suttie, who was particularly concerned about this, that these processes will ensure that the DAs have an opportunity to contribute to the UK-wide policy discussions that relate to the market.
Amendments proposed by a number of noble Lords —my noble and learned friend Lord Mackay, the noble and learned Lord, Lord Hope, the noble Lords, Lord Stevenson, Lord Hain and Lord Foulkes of Cumnock, the noble Baroness, Lady Ritchie, and my noble friend Lady Altmann—each set out obligations relating to the common frameworks programme. The Government’s clear view is that legislative solutions are not the right choice for common frameworks. As the noble and learned Lord, Lord Hope, said, common frameworks are governed by principles agreed between the UK Government and devolved Administrations back in 2017, which make clear that they are inherently voluntary mechanisms that include clear governance processes to allow for dispute resolution and changes where appropriate.
Moreover, they are non-statute-based mechanisms born of intergovernmental agreement in the light of the Government’s decision that returning EU powers would flow directly to the DAs at the end of the transition period. As such, frameworks are part of a broad set of mechanisms for intergovernmental working, which will be delivered through the reformed intergovernmental relations process. We argue that placing frameworks on a legislative footing in the way that some of these amendments propose would require a wholesale revision of the principles on which they have been developed, and it would, of course, require the consent of the devolved Administrations, given the joint nature of this work. We are not aware of pressing calls from them to put the programme on a statutory footing, and it is clear that, if the United Kingdom Government were to decide to put frameworks in statute unilaterally, it would create an imbalance in the relationship with the devolved Administrations and could be disruptive at a time when accelerating delivery is the priority.
The noble Lord, Lord Vaux, and others spoke, rightly, of flexibility. Frameworks are designed to operate flexibly. How often has flexibility been to the benefit of our nation in enabling and assimilating change? This is why the common frameworks have an important role. Flexibility and adaptability are their key benefit, allowing for agreements on common approaches to policy in response to changing requirements. It is not clear that the same flexibility could be maintained if frameworks were put on a statutory footing.
The amendments in this group also seek to create processes that would require the consent of the devolved Administrations to exercise powers in the Bill. In particular, the amendments put forward by the noble and learned Lord, Lord Hope, and the noble Lord, Lord Stevenson, make reference to the exhaustion of the common frameworks process. Such a provision is likely to be very challenging to define, and in the event of disagreement between parties to common frameworks, it may be open to subjective interpretation. After all, one man’s exhaustion, is another man’s “Let’s talk again next month, folks”. In developing our approach, we have sought to balance the need to work closely and collaboratively with the devolved Administrations, with the requirement for a safety net to ensure that the seamless UK internal market continues to operate.
Amendment 178, tabled by the noble Lord, Lord Stevenson of Balmacara, seeks to prevent regulations in common framework areas taken under Parts 1 to 3 being commenced unless frameworks have been agreed. In our judgment, this mechanism does not provide an appropriate balance between the collaborative approach taken in the frameworks process and the need to protect the UK internal market. In the event that policy approaches cannot be agreed, the amendments could lead to economic barriers being erected within the United Kingdom, and I have not heard a single noble Lord question that it is essential to avoid that.
The approach taken in this Bill will ensure that all devolved powers remain so, so in our judgment it is not necessary to place further restrictions in the Bill relating to devolved powers, as proposed by the noble Lord, Lord Hain, my noble friend Lady Altmann and the noble Baroness, Lady Ritchie. We believe that our approach will allow the devolved Administrations to continue to innovate and regulate with the powers at their disposal without damaging the ability of all UK companies to trade in every part of the United Kingdom, which is the objective to which we all subscribe.
Many have inquired about the relationship between the common frameworks programme and the market access principles; my noble friend Lord Callanan spoke of this earlier. Simply put, the legislation means that the devolved Administrations will be free to act within their areas of competence, provided that they do so in a way that does not put up barriers to the smooth functioning of the internal market. The frameworks programme and the market access principles are designed to work alongside one another. On the one hand, common frameworks allow for greater depth of regulatory co-operation and a high level of intra-UK coherence but in a limited number of mainly sector-specific policy areas. On the other hand, the market access principles set out in the Bill will provide a safety net to catch issues that individual frameworks cannot address. This is the insurance policy that makes it possible for the status quo of seamless intra-UK trade to continue.
The noble Lord, Lord Foulkes of Cumnock, in what I thought was, as always, a fascinating speech, pointed to the importance of maintaining high regulatory standards across the United Kingdom. Again, I repeat that this Government are committed to ensuring that that will remain the case. It is important to be clear that we have no plans to lower the important regulatory protections that the UK currently enjoys, which in many cases go beyond EU requirements. It is thus unnecessary to create duties relating to maintaining high standards. The devolved Administrations will continue to have the ability to regulate in devolved areas to support our common goal of maintaining and indeed improving high regulatory standards. Moreover, in many policy areas common frameworks will play a vital role in setting out joint approaches to regulatory standards.
Noble Lords, particularly in the Schedule put forward by the noble and learned Lord, Lord Hope, expressed interest in the management of regulatory standards in a range of areas, including food, animal feed and welfare, food compositional standards and labelling, plant health and chemicals and pesticides. I confirm that pesticides and chemicals will be the subject of a legislative framework, while common frameworks are being developed to cover each of these areas and will make provision for the maintenance of high standards.
That is the Government’s response to the amendments that have been tabled on paper in this debate. It has been an extraordinary thoughtful debate and, although I agree with my noble friend Lady Noakes that at times we were seeing a lot of the debate from one end of the telescope and most noble Lords on all sides understood the need to secure our internal market, we will of course continue to consider the arguments that have been put forward in the debate and indeed in prior engagement. I can give a commitment to the Committee that we will be open to engagement and discussion on these important issues between now and Report.
I apologise profusely for the many very specific questions and examples that were raised in the debate that have not been answered—for example, I remember that the noble Lord, Lord Hain, asked whether the Scottish Government will still be able to regulate the Scottish teaching profession and whether the Bill will cut across the freedom to do so—but I think it would be best if we try to pick up all the very specific questions such as that and provide an answer to noble Lords as soon as possible. I hope that will be long before we get to Report. I certainly undertake to do that.
With those comments about future discussions, but with the reaffirmation of our principles—that we want good and friendly co-operation with the devolved Administrations in the common interest of securing a prosperous United Kingdom in which business can thrive—and with a restatement of our commitment to common frameworks, to which I add the hope that that programme will move very much closer to completion by the end of the year, although with a restatement of our feeling that, in the interests of certainty in the future, the principles of mutual recognition and non-discrimination enshrined in the Bill are valid, important and widely supported by business, I ask that at this juncture the noble and learned Lord withdraws his amendment.
My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Bruce of Bennachie.
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?
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.
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.
Amendment 5 withdrawn.
My Lords, we now come to the group beginning with Amendment 6. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate, and anyone wishing to press this or any other amendment in the group to a Division should make that clear in debate.
6: After Clause 1, insert the following new Clause—
“Legislation to which market access principles apply
(1) Legislation on market access principles may only apply—(a) when the common frameworks process in respect of subjects within a description listed in Schedule (Subjects to which market access principles may be applied) has been exhausted, and(b) only so far as it relates to a subject specified in regulations made by the Secretary of State.(2) Regulations under subsection (1) may specify a subject only if it is within a description listed in Schedule (Subjects to which market access principles may be applied).(3) The Secretary of State may by regulations amend Schedule (Subjects to which market access principles may be applied).(4) Regulations under this section are subject to the affirmative resolution procedure.(5) Before laying a draft of a statutory instrument containing regulations under this section before either House of Parliament, the Secretary of State must give notice of the proposed regulations to—(a) each devolved authority, and(b) the Competition and Markets Authority.(6) The Secretary of State may not lay the draft instrument before either House of Parliament until—(a) the Secretary of State has received—(i) a statement in relation to the proposed regulations from each devolved authority, and(ii) a report or advice on the proposed regulations from the Competition and Markets Authority, or(b) the period of 12 months beginning with the day on which notice was given under subsection (5) has ended.(7) When a draft of a statutory instrument containing regulations under this section is laid before either House of Parliament, the Secretary of State must at the same time lay before that House copies of any statements, report or advice mentioned in subsection (6)(a).(8) In this section, “devolved authority” means—(a) the Scottish Ministers;(b) the Welsh Ministers;(c) the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment means that the United Kingdom market access principles only apply after the process for agreeing common frameworks has been exhausted. It introduces a new Schedule, inserted by another amendment in the name of Baroness Finlay, listing the subjects to which the common frameworks apply and for which regulations may be made if common frameworks are not agreed.
My Lords, I have tabled both the amendments in this group. Amendment 6 is arguably the most important of all the amendments that I have laid, because it aims to do what many of the amendments in the previous group also intended to achieve. In the light of the disappointing ministerial response to the amendments in the previous group, so superbly introduced by my noble and learned friend Lord Hope of Craighead, it could be said that I am having another go, in a more watertight way. Amendment 6 puts common frameworks on the face of the Bill. Amendment 44 is consequential on Amendment 6, since it would make the point at which the regulations came into force the trigger point from which the market access principles would apply. I assure the Government that these amendments are drafted with the Welsh Government, who want the process on the face of the Bill.
I am grateful to the Minister for meeting me and other Peers last week and for his letter of yesterday. In it he states:
“The common frameworks programme was designed to find effective, pragmatic and flexible ways of working with the devolved administrations. The purpose of frameworks is to ensure that intra-UK policy-making is based on agreed structures for cooperation across the UK. They are voluntary in nature and allow the UK Government and devolved administrations the opportunity to find common approaches to the exercise of powers returning from the EU. One of the main benefits of the programme is its inherent flexibility to adapt to changing circumstances.
Enshrining common frameworks in legislation would remove the voluntary element on which the common frameworks programme is based. As frameworks are developed jointly with the devolved administrations, any change of this nature which departs from the agreed principles of the programme would need to be agreed with the devolved administrations. It would also likely eliminate the flexibility which makes frameworks effective in managing intergovernmental policy development in the long term.”
I agree that they are voluntary, but without them in this Bill it reads rather like a blunderbuss, sweeping over all in its path. That is precisely why the devolved Government in Cardiff want common frameworks to be the starting point for this legislation, not hidden away and never referred to, like the first Mrs Rochester. These principles of frameworks were first agreed in October 2017. More than 150 areas have been identified where EU law intersects with devolved competence, including 24 areas, now narrowed down to 18, where legislation may be needed. Thirteen of them are well on their way for early delivery. In the Minister’s response to the first group of amendments today, he flagged up that there will be “dozens of new powers” and responsibilities for the devolved Governments—I hope I have quoted his words correctly. This will inevitably mean wider divergence and, I suggest, is an even stronger reason for an agreed mechanism to find consensus and avoid the situation outlined by the example of flour. Only when that hits the buffers should Parliament step in.
The reason they need to be in the Bill—I believe that Scotland would strongly support this approach—is that they provide an agreed framework, whereas the Bill as drafted empowers the imposition of market access principles across all areas of economic activity, regardless of whether divergence between the devolved nations on a specific issue would pose a threat to the coherence of the internal market. It ignores the frameworks process that has been developed. It seems to assume such frameworks will fail without spending time listening to both sides to reach agreement, which may—let us be realistic—be an agreed compromise. It fails, if I may draw on John Lennon, to “give peace a chance”. It may not be the intention—though some may fear it may be—to launch a full-frontal attack on the current system of devolution, but whether it is or not, its approach feels overbearing and intolerant of difference.
This amendment and equivalent ones in respect of Parts 2 and 3 reverse the burden of proof. This would require the frameworks to be worked through properly, not in a tokenistic way. Failure to reach agreement would trigger action. It would create a system where the market access principles could then be brought into effect by affirmative resolution of this House and the other place. The principles would then, and only then, apply to specified areas of economic activity: areas where attempts to agree a common framework by negotiation between the four Governments of these islands had failed and where the Government could make a credible argument that there was a threat to the economic coherence and well-being of the United Kingdom.
That approach would turbocharge the efforts which are already under way to agree common frameworks in all those areas which the Government identified as risking the integrity of the UK market if divergence was not constrained. I am sure that the noble Baroness, Lady Andrews, will update us, but my understanding is that, while progress has been somewhat slow, there are no areas where there is deadlock and—despite what the Government are saying—there is no urgency to resort to the draconian measures of the Bill. This is because all parts of the United Kingdom will operate within retained EU law after 31 December, and the devolved Governments have made it clear they will not make regulatory changes while final sign-off on the frameworks is pending.
Noble Lords might ask why that matters to me, a Cross-Bencher. Put simply, if the Government can impose market access at will and bypass the frameworks, it will lessen the opportunity for different parts of the United Kingdom to set an example in tackling the huge environmental, social and economic issues that face us. Over the past 20 years, devolution has provided an opportunity for policy innovation in a wide range of areas, from charging for plastic bags to the presumption of consent for organ donation to minimum unit pricing for alcohol. Devolution has allowed one part of the UK to lead on a policy, evaluate it and iron out difficulties before others adopt the change. I am grateful to the Secretary of State for Wales and to Ministers who met with me and other Peers to discuss this Bill. We were told that these policy areas themselves, where the legislation is already on the statute book, will not be affected. However, I heard no reassurance that similar innovation will be possible in practice in future and that the ability to exert devolved powers will indeed be protected. Obesity is an enormous threat to our health but, as I highlighted at Second Reading, action to ban sugary fizzy drinks in one part of the UK could effectively be prevented by the Bill. That is simply not acceptable, particularly when the Government here in Westminster come under great pressure to defer far too much to the interests of some of the large multi-national food conglomerates.
The system Amendment 6 proposes is practical and increases parliamentary control of how the balance is achieved between the devolved institutions’ freedom to experiment and the concern to safeguard the internal market, whether or not the term “common framework” appears on the face of the Bill. It is exactly the same approach that came out of the debate on what is now the European Union (Withdrawal) Act 2018. In that debate, the Government’s initial rationale was that a blanket power was required to stop any change being made by the devolved Governments. However, this was later amended following persuasive debate in this House and was replaced with a requirement for the Government to justify any areas in which they wish to freeze EU retained law. That approach has worked well: the devolved institutions have not developed proposals to jettison retained EU law as soon as the supposed shackles are removed, and consequently the fall-back powers in Section 12 of the EU (Withdrawal) Act have not been required.
Let us follow the example we set with that legislation. There is no need to agree to the blunderbuss approach in this Bill. A great deal of work has gone into the common frameworks already, work that can and should be built on. At the end of the day it will help restore confidence by demonstrating that the Government genuinely want to respect all four nations of the UK and do not want to fuel separatist rhetoric. I beg to move.
My Lords, these amendments have been prepared by the Welsh Government and have their support; I am pleased to support them. The Welsh Government, as noble Lords know, are committed to the union of the United Kingdom. These proposals before us today seek to find a route through in the way that the Bill has been put together. In fact, they intend to put the horse before the cart rather than the cart before the horse. In the discussions that we had on the previous group and subsequently, there have been for me some very puzzling matters, and I am trying to work out quite where the Government have placed themselves.
First, on timing, the Government seem to argue that we must have the Bill in place in its entirety so that on 1 January they can move forward and have something absolutely concrete to work from. I will come back to that point in a moment. The second point is that the Government have not been able to find any way to describe something which falls outside the area of the structure.
In the last round of amendments, the Minister described additives for flour. Flour and additives are part of the common framework on nutrition. I am told that the three frameworks which are already on the way to early delivery and will be fully operational by the end of the year cover nutrition, hazardous substances and emissions.
I am puzzled why the Government are not able to provide any specific examples of what falls outside the framework, apart from “the future”. We do not know what the future is, but as it arrives we will sort out legislation and frameworks as we move along. That is bound to happen.
Timing is another puzzle because the Government do not want to proceed with the common frameworks as the underpinning structure for this Bill. They seem to want to use what the noble Baroness, Lady Finlay, called a blunderbuss. Battle axe might be another way of putting it. Basically, they do not want the co-operative approach which has been at the forefront of these frameworks.
In September, the Government published their view of the frameworks. Right at the front—on the first page—were the principles which the Government are now seeking to break about the way in which they intend to govern, and about giving and not taking away powers from the devolved Administrations. They were right at the top of the Government’s own papers as recently as last month. If the Government want to put them front and centre, but need something temporary, why not say so? Why not put in a sunset clause, or some form of clause which says this will be a temporary measure until particular frameworks are in place?
The Government’s position is not defensible inside Wales as I know it. The Welsh Government have sought to bring forward a proposal which meets the Government’s aspirations. It says, “Put the common frameworks first and then, if there is any dispute whatever, use the backstop which is being put into this Bill through regulations.” We all want to see an alteration to the way in which they have been carried out and for there to be adequate consultation and debate.
My concern is that I am not certain that the Government know where they are going. I am not certain that they know what they mean by “putting the common frameworks front and centre”. Is this a timing issue? I hope that the Government will be able to answer all these questions.
I want to talk briefly about the one-use plastic teaspoon. They will be banned next year by the Welsh Government, through the Welsh Assembly, because they are bad for the environment and do not degrade in the soil. One-use cutlery is damaging for us as a country and for our environment. However, if that legislation is passed, there is nothing to stop a whole generation of English single-use plastic spoon manufacturers bringing them across the border and distributing and selling them wholesale in Wales. This is an extreme example, but it illustrates that there are bound to be some divergences if the power exists. If, as a Government, you have been given powers and you want to enable them, but you find you are being stopped because of this sort of extraordinary behaviour by a Government somewhere else, that is not going to help the union. The union of this United Kingdom is to be treasured, but to treasure it you have to respect it. I do not believe that the Government are doing so in this Bill. So I ask them all those questions about the direction in which they are going. Will they try to outline whether these frameworks will be placed front and centre? Is it a timing issue? Can they come up with some examples—one would do—which would tell us where the gaps are?
My Lords, I can speak more briefly to this amendment than the one I spoke to earlier, because my arguments will be much the same. What attracts me particularly about this amendment is that it once again asks the Government to look at the possibility of putting in the Bill the process whereby the Bill becomes the default position and the common frameworks process has to be exhausted before the market principles kick in. I have said before that I think that this is logical. It helps the Government to achieve their own objectives.
When the Minister replied to the previous debate, it was very welcome to hear him say that he was prepared to give more thought to things he had heard the House say this evening. He seemed to think that this process of exhaustion was somehow going to be rather difficult and messy to achieve. From what we have seen in the Common Frameworks Scrutiny Committee, the dispute resolutions are worked out very clearly and in detail. I do not see a problem with that process at all and I would be happy to talk to the Minister about it. If he is worried about that, we can provide some reassurance and, as we scrutinise it, there may be some things we can do to improve the process. If it is a technical problem, then that is what we are here to solve. If it is a problem in principle, then we need to know; he needs to tell us.
The rest of the amendment is slightly more legislative in structure than the amendments from the noble and learned Lord, Lord Hope of Craighead, but I continue to support it in principle because it flags up the significance of common frameworks and the importance of the need for a fit between the Bill and the common frameworks.
The noble Baroness, Lady Finlay, asked me whether we had come across any areas where there was deadlock or difficulty in securing agreement. In the summaries of the frameworks that we have seen so far, and in the one completed framework, we have not seen anything that would alert us to the fact that there is a continuing problem. The problem that the framework negotiators have is the unsettled nature of European negotiations and the issues posed by this Bill itself. They are bound to be waiting for resolutions of different sorts. The processes that they are establishing are clear, transparent and robust. As I say, they offer a solution in practical terms, as well as, frankly, in ethical and political terms, as far as the Government are concerned.
With that, I simply say that I am pleased to support the amendment in principle. I look forward to the Minister, the noble Lord, Lord Callanan, having another go at some of these very specific questions that I think we have a right to hear some answers to.
My Lords, I will speak to Amendment 6. I have already expressed some concerns about delays and problems that could arise in trying to satisfy devolutionary feelings beyond the existing devolution settlements and the withdrawal Act, which have already given many powers to Scotland, Wales and Northern Ireland.
We need always to bear in mind the need for a well-functioning single UK market. That is in the interests of citizens, and of charities and businesses which operate across the borders of Northern Ireland, Scotland, Wales and England. My noble friend Lady Noakes cited some figures which bear repeating. I think she said that 60% of Welsh and Scottish exports and 49% of Northern Ireland exports come to other parts of the UK. Incidentally, I was glad to hear my noble friend the Minister committing the Government to high regulatory standards.
We heard from the noble and learned Lord, Lord Hope, in an impressive speech, and from the Minister in an equally persuasive one, about the role of common frameworks in relation to Amendment 5. I heard what my noble friend the Minister said, but it may be that a brief reference to these common frameworks could make everyone more comfortable with this Bill—I was thinking of an annual report on how they are working and how consultations have progressed. It seems odd, given their importance, that there is no reference to them at all.
While I share the desire of the noble Baroness, Lady Finlay of Llandaff, to have more clarity and agreed processes, I fear that these amendments could be a recipe for an ineffective single UK market from day one. As we have heard, the common frameworks will take time to agree, in the same way as they did when they were established in the original EU Common Market in the 1960s and 1970s. The Constitution Committee has acknowledged this, so I cannot see that we can agree to an amendment that delays market access principles until the frameworks are all agreed.
On a point of detail, whatever we agree that the CMA might do in the way of monitoring, it does not have the skills to participate in law making in the way proposed in this amendment. I also have some concerns about yet more delegated powers. I need to understand better, perhaps from the noble Lord, Lord Stevenson, why we would want to put in extra measures using delegated powers, rather than adding what is needed to the Bill substantively.
In closing, we should remember that the transition period ends on 31 December, and we must be able to look after the economic interests of all four countries of the UK from 1 January next year. That is why the Bill has been brought forward. While this has been an interesting debate, I will not be supporting the amendment as it stands.
My Lords, it is a pleasure to follow the noble Baroness, Lady Neville-Rolfe. I found myself in agreement with some of what she was saying, and I respect very much the background in business and marketing from which she comes, which of course is of great value to the House in this discussion. She said that we were all agreed on the need for a fully functioning internal market and, as I tried to make clear in my speech, I am in absolute agreement with that aim. Obviously, everything we would do is working towards that aim, despite the differences of perspective across the various nations of the United Kingdom.
The noble Baroness said that a brief reference might be a way of making the devolved Administrations more comfortable. For my part, I have been trying to adopt a light-touch approach, which may not be too far away from what she is talking about—but it would have to be pointed enough to meet the concerns of the devolved Administrations and give them the assurance that they need for the future. So in a way I find myself in a rather frustrating position. I cannot believe that we are all that far apart, but the gulf that divides us at the moment is very deep. I would love to find a ladder, or something, that would take us across this gulf and solve the problem. That is why I am certainly open to discussion.
Before I go any further, I should say that I am entirely behind the noble Baroness, Lady Finlay of Llandaff, on the principles that lie behind her amendment. Indeed, I am extremely grateful to the Welsh Government, who have done so much to inform us about the background to the issue and who have done a great deal of drafting work to show us what amendments might be made to work to solve the problem as they see it. Although they look very different, my own amendments were inspired by the work that they have done, and I owe a considerable debt of gratitude to them for that, and for their generosity when I indicated that I would want to take a rather different approach in the way that the amendments should be worded. The principles behind us are exactly the same and, for that reason, I entirely support, in principle, the amendment in the name of the noble Baroness and applaud the way in which she introduced it.
This issue is simply not going to go away. We will be pursuing it in various ways on Report. For the time being, I encourage the Minister to appreciate that there is some force in the point made by noble Baroness, Lady Neville-Rolfe. If her approach were adopted, one could see this frustrating gap narrowing slightly—and I would love to see it closed over so that we could solve the problem completely, to the satisfaction of both sides.
I call the noble and learned Lord, Lord Morris of Aberavon. Do we have Lord Morris of Aberavon? We will move on.
My Lords, I apologise to the House. I understand I was on the list for Amendment 5, but I never applied to speak on that one.
This is an interesting amendment. My colleagues, the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, have already made the point that we are very close to 1 January—in fact, we are 66 days away, by a quick calculation—and so I look at that time dimension against the complications within this proposed new clause.
As I said much earlier in the evening, I am a marketing man by profession; I worked very closely with a large number of manufacturers when I was a senior director in one of the major advertising agencies. I find some of the elements of this amendment, or proposed new clause, too prescriptive. Take subsection (1)(a), where the whole principle is that nothing is going to happen until the
“access principles may be applied”
and have been “exhausted”. We are in a time framework where that is not going to work. It may be necessary, later on, to look at how it does work in principle, and maybe some changes should be made then.
I worry deeply. We are a creative nation. We are in an enormous period of change. One sees now what is happening in the fintech world: it is moving forward at an enormous rate, and it does not want to be stultified by a whole series of restrictions before it can be added to a particular schedule or not. All of us are conscious that there is a whole variety of different companies, across the world, trying to find an answer to Covid-19 through new drugs and vaccines.
Personally, I am terribly practical, and I just do not see the elements of this amendment helping the United Kingdom move forward. There may be bits of it that have some relevance—I am sure there are—and I recognise that they are put forward with a genuineness by people who want things to work. But when I listen to the noble Lord opposite talk about the Welsh Government, and having observed what is happening down in Wales now, one has to say that it is not terribly practical. I am not sure that the credibility of the Welsh Government is very strong in today’s world.
I hope my noble friend on the Front Bench will understand that, perhaps in the future, some of these elements may need to be applied, but, as matters stand today, with 66 days to go, frankly, I do not think that this proposed new clause helps at all.
I call the noble and learned Lord, Lord Morris of Aberavon.
My Lords, the concept of common frameworks is notable for its absence from this Bill, as many noble Lords have said. For three years, they have been accepted as the way forward, on which the future operation of the UK internal market would be built. Now, they have been silenced.
I, along with a number of other noble Lords who have spoken on this and previous groups, am a member of the Common Frameworks Scrutiny Committee, ably chaired by the noble Baroness, Lady Andrews. I can report that common frameworks are alive and well and that a great deal of work has gone into them. There is general agreement from stakeholders, the devolved assemblies and UK Government representatives that they can provide a sensible and effective way forward. Amendment 6 seeks to flesh out the principles of co-operation on which they should work. That common frameworks process should be exhausted before the market access principles come into place.
The Government respond by saying that there is no need for common frameworks, as a concept, to be enshrined in legislation. I am sceptical. There are already signs that the Government are attempting to sidestep common frameworks—for instance, on the emissions trading scheme, where they have announced their intention to consider replacing it with a carbon tax, which would be a UK responsibility and would effectively take away the devolved powers. That is despite the fact that the common framework on this issue—emissions trading—has just about got to the final point. Despite the Minister’s assurances, I fear that the Government are poised to put the principles in the Bill into effect with the excuse that common frameworks have not proved workable.
Amendment 6 has cross-party support. Noble Lords have emphasised that it has been designed in consideration with the Welsh Government and reflects the well-founded concerns of the devolved assemblies. As with a number of issues, there is a lack of clarity on how common frameworks will link with the market access principles. Common frameworks set up a system—a framework—for the operation of markets, complete with dispute mechanisms. They allow for changing standards over time. So, I ask the Minister: how does this fit in with the provisions in the Bill that remove the right of devolved Administrations to introduce new standards in many circumstances? If the Government genuinely support common frameworks as the fundamental building blocks of the way forward, will the Minister agree to accept Amendment 6, which states that the Bill’s market access principles apply only after the common frameworks process has been exhausted? Will she clarify the relationship of the Bill to common frameworks? Will she accept our assurances that the Welsh Government, for instance, want common frameworks in the Bill?
Will the Minister also explain precisely how the measures in the Bill will guarantee that the devolved Administrations will be able to experiment and develop novel approaches, as they have in the past? That is how a great deal of social and environmental progress has been made in the last two decades. I give the example, used earlier in the debate, of single-use plastic bags. Wales experimented with the concept of paying for single-use plastic bags and was dramatically successful in reducing their use. The English approach to this, taken by the UK Parliament, was very sceptical, but Parliament saw that it worked and, in due course, England followed suit. Wales is an ideal size as an experimental sounding board.
Amendment 44 to Clause 9 refers to the non-discrimination principle. For clarity, can the Minister spell out to us where the requirement for the provision of, for example, labelling in the Welsh language would stand in relation to that principle? There is a legitimate reason for the need for Welsh labelling in certain circumstances, and as policy in relation to the Welsh language matures, it is fairly certain that there will be increasing demand and need for labelling in the Welsh language. How will that fit with the Bill?
In response to the noble Baroness, Lady Neville-Rolfe, there is no question of a delay to the operation of the single UK market. It is operating well now, and there is absolutely no reason why it cannot continue to operate well.
The noble Lord, Lord Naseby, was concerned about the time potentially taken for agreement of common frameworks. I can assure him that strict time limits are built into common frameworks in the way in which they would operate.
In summing up the previous group, the noble Lord, Lord True, emphasised the Government’s commitment to common frameworks. However, he also said that many businesses support the Bill because it will deal with uncertainty. I say to him that the uncertainty is caused not by the devolved Administrations but by the Government’s failure to secure a deal with the EU. He then went on to produce a hypothetical example of how common frameworks might not cover all eventualities. That is a prime example of how this Bill is a solution in search of a problem rather than the other way round.
Ever since the establishment of devolution, constitutional experts have warned about its flimsy foundations. However, it has continued to operate, largely on the basis of good will. This Bill is not offered in a spirit of good will. It also illustrates how easy it is to dismantle the process of devolution. My own experience of Welsh devolution—as a Member of the Welsh Assembly, as it then was; as a Welsh Minister; and, in this place, as a UK Government Minister—has brought home to me the importance of the detail of devolution powers. Welsh devolution powers came slowly and piecemeal, and only in the most recent Government of Wales Act were they given true coherence. I say to the Government: hollow out those powers now at your peril. A large majority support Welsh devolution, and it is cross-party support. There is also, to my regret, increasing support in Wales for independence. If the Government have any common sense, they will leave well alone. They will face renewed uncertainty in Northern Ireland with this, and will continue to face persistent problems in Scotland. They should concentrate on bridging the gaps with the devolved Administrations and not widening them.
My Lords, at the end of the previous group the Minister, the noble Lord, Lord True, kindly said that his mind was not closed to further discussion on this issue about common frameworks and how they relate to the Bill. I welcome that. In a sense, the amendments in this group are part of the same debate. I therefore hope that they will also be included in the next-stage discussions, as they are a variation on the theme.
I set out my route map for progress in my response to the previous group and I will not repeat it. However, I endorse the points made by the noble Baroness, Lady Finlay, my noble friend Lady Andrews, the noble Lord, Lord German, and the noble and learned Lord, Lord Hope, particularly their growing confusion about what exactly is in the Government’s mind on this issue. Perhaps the noble Baroness, Lady Bloomfield, coming fresh to the debate, can persuade us that there is indeed a coherent logic to the Government’s position—because it certainly eludes me.
I hate to disappoint the noble Baroness, Lady Andrews, but it falls to me to respond to this debate. I will now speak to the two amendments—Amendment 6 and the consequential Amendment 44—concerned with how UK market access principles, as proposed in the Bill, will apply. I understand that the noble Baroness, Lady Finlay of Llandaff, has tabled these amendments on behalf of the Welsh Government. Accordingly, I would like to begin by thanking the Welsh Government for their positive engagement on this Bill so far. The UK Government look forward to continuing constructive future engagement with the Welsh Government.
As my noble friend Lord True said earlier, we continue to work closely with the Welsh Government to develop common frameworks, in line with the framework principles agreed by the Joint Ministerial Committee (EU Negotiations) in October 2017. I know the Senedd were happy to see the Joint Ministerial Committee provisionally confirm the first two frameworks of the programme on hazardous substances and nutrition. Work continues in earnest to reach further such agreements in the coming months and beyond.
Before I turn to the detail of the amendments, I want briefly to cover the context of the Bill in order to explain the approach the Government took to applying the market access principles. At the risk of repeating the arguments of my noble friend Lord True, now that we have left the EU and as we recover after our fight against Covid, it is vital that we deliver legislation which allows the continuing smooth function of our UK internal market at the end of the transition period. The Bill aims to ensure frictionless trade, movement and investment between all the nations of the UK. The policies that different parts of the UK choose to pursue in the future is a matter for each Administration. The Bill ensures that these local policies can be pursued while maintaining seamless trade in the UK internal market. There is no question of the UK Government intending to bypass the common frameworks; the Bill is intended to complement them.
The approach we have taken in the Bill 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 without damaging and costly regulatory barriers emerging between the nations of the UK. With this context in mind, I turn to the amendments. They would, in combination, prevent the market access principles from applying at the end of the transition period. The lengthy process they put in place before the principles can apply, including the need to exhaust frameworks discussions, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. The resulting threat of unmanaged regulatory divergence would not provide the certainty businesses need and could deter businesses that wish to expand and supply customers across the UK. This is not desirable, especially as we continue our recovery from Covid-19.
The amendments would also limit the areas to which the market access principles can apply. Again, this would unduly constrain the scope of the principles and fail to protect the internal market fully. In contrast, the Government’s approach is more comprehensive and ensures that businesses in all sectors can continue to trade across the UK without facing new barriers or discrimination.
The amendments also present a challenge in defining the exhaustion of the frameworks process. In all cases, common frameworks are designed as living arrangements, capable of change by agreement as required. Thus, the process is never wholly exhausted. The new clause also specifies a consultation process with the devolved Administrations and the CMA, or, failing that, a 12-month delay before any regulations can be made specifying areas to which the market access requirement would apply. The Government are already committed to appropriate consultation with the devolved Administrations; however, under the terms of the amendments, the time limits proposed would create unnecessary delay.
The noble Lord, Lord German, asked about the timing of the Bill. Reduced certainty would indeed be a disaster to our recovery from Covid-19. We do not believe that it is acceptable for businesses to have less certainty on trade with their UK supply chain after 1 January 2021 than they have today and have had for centuries. The UK Government are committed to ensuring that the status quo of seamless internal trade is maintained for the shared prosperity and the welfare of people and businesses across all four nations of the UK. Without the internal market, livelihoods would be at risk. There is also the issue of future-proofing the Bill to allow that, for the jobs of the future, mutual recognition will apply across areas that we may know nothing about today, including things such as the artificial intelligence industry.
My noble friend Lady Neville-Rolfe and the noble and learned Lord, Lord Hope, asked whether reference should be made to the common frameworks should be made in the Bill. We already have a statutory obligation to report quarterly on progress on the common frameworks, so there is no need to put this in the Bill as well. Far from being silenced, as the noble Baroness, Lady Randerson, suggested, as she knows, two common frameworks have already been agreed. However, some 38 more have yet to be considered, with only nine or 10 weeks until the end of the transition period. They do indeed provide a very sensible framework, but they remain voluntary. Ultimately, the common frameworks depend on continued co-operation. In spring 2019, the Scottish Government walked away from the internal market project. This legislation is required to provide certainty for business and consumers.
The noble Baroness asked about labelling in Welsh. There is nothing to prevent labelling in Welsh for goods produced in Wales. I was also asked about the use of plastic teaspoons. The Welsh Government can still ban their use, but perhaps not their sale.
For these reasons, and for the uncertainty and confusion that it would generate for businesses and consumers, unfortunately the Government cannot support the amendments in this group and I would ask noble Lords to withdraw or not move them.
I have received one request to speak after the Minister. I call the noble Lord, Lord Purvis of Tweed.
My Lords, I listened very carefully to what the Minister said about the need for certainty, which seems to be the overriding approach. But, having listened to my noble friend Lord German and the noble Baroness, Lady Finlay, I would refer to the Food Standards Agency report, Food and Feed Safety and Hygiene Common Framework Update. Paragraph 3.15 states, in relation to adopting mitigating measures against mutual recognition, which we will discuss in another group on another day, makes a quite interesting point that
“where common approaches are taken, mutual recognition will not apply.”
If that is the case in this Bill, the common approaches across the nations—the mutual recognition and certainty that she indicated—will not apply. But we do not yet have full agreement on all the common frameworks, so how can that apply under this Bill, given that we have not reached the agreements yet? However, the Government’s own position is that mutual recognition will not apply if common approaches are taken on any regulatory changes. So which is it? Is it in this Bill or is it within the common frameworks?
I am afraid that the noble Lord has the advantage of me in that I have not seen that bit of the food standards framework. I would rather look at his question again in Hansard tomorrow and reply to him in detail. I do not think that I am able to give him a full answer now.
My Lords, I am most grateful to all noble Lords who have spoken. I am grateful to the Minister for her response but it is disappointing.
I must say that I appreciate the noble Lord, Lord German, pressing the Government on why they cannot specify any examples of potential disruption to the internal market, because we really need to hear those. Perhaps the Minister might write to me with some of those specific points following this debate. I note that the noble Baroness, Lady Andrews, confirmed that there is no evidence that common frameworks are breaking down, nor that there is an inability to be fast.
I can see that the timing in the amendment needs to be looked at and renegotiated, and I am sure that would not be a problem. I know that the Welsh Government are sincerely committed to bridging the gap that the noble and learned Lord, Lord Hope, outlined so clearly; at the moment it is a chasm, but it can be bridged.
I agree with the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Naseby, that we all want the UK to prosper and things to work, but we must find a way to make them work by not splitting the UK, which is what the Bill seems to be doing at the moment.
I am grateful for confirmation from the noble Baroness, Lady Randerson, and the noble Lord, Lord Stevenson, of cross-party support for this approach. I have to agree with the noble Baroness that there is little evidence of the Government’s good will towards devolution in the Bill as drafted, and that at the moment the logic of the Government’s approach is quite difficult to discern.
The amendment was a genuine attempt to restore confidence between the central Westminster Government and the devolved Governments. I hope we will return to it because I think we need to. This was a hand of peace, an olive branch, and we must return to it later on Report. For the moment, though, pending further discussions and negotiations, I beg leave to withdraw the amendment.
Amendment 6 withdrawn.
House adjourned at 10.01 pm.