After Clause 10 - Further exclusions from market access principles

United Kingdom Internal Market Bill – in the House of Commons at 2:10 pm on 15 December 2020.

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Votes in this debate

  • Division number 187
    A majority of MPs voted against broader exemptions to the "market access principles" intended to ensure a free internal market within the United Kingdom, and not prioritise rules agreed by the four nations of the United Kingdom over those principles.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London) 2:10, 15 December 2020

I beg to move,

That this House
disagrees with Lords amendments 1F, 1G, 1H, 1K, 1L and 8M.

I am pleased that we continue to make positive progress on the Bill and that both Houses have continued to find agreement on a number of issues. In large part, this is due to colleagues from across both Houses continuing to have constructive and positive discussions with the Government. I want to put on record my thanks to colleagues on the Opposition Benches in this place, and the other place, in particular, for their engagement.

There are still a few outstanding areas, which have gone back and forth between the Houses, and I will outline the Government’s rationale for why we cannot accept the proposals as drafted. I will begin by speaking about the approach to exclusions taken by the Bill, which is a shared point across amendments 1F, 1G, 1H, 1J, 1K, 1L and 8M. I will then address the specifics of the common frameworks amendments and wider market access exclusions.

As I said last week, and as my noble friends Lord Callanan and Lord True said in the other place yesterday, the Government have been clear throughout these debates that we agree that there is a need for an exclusions regime. However, it has to be carefully drafted and provide certainty for business. In drafting the Bill, and clauses 10 and 17 specifically, the Government have designed an exclusions approach that achieves a careful balance. Both the noble and learned Lord Hope and Lord Stevenson have narrowed the scope of their amendments and I thank them both for their continued dialogue with the Government on those. Our assessment remains, however, that the approach in both sets of amendments goes too far both in the breadth of exclusions that it would require the Secretary of State to create and the uncertainty that it would lead to. These amendments would be detrimental to the clarity, simplicity and certainty that the Bill intends to provide.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

My reading of these amendments is that they are extremely watered down from what we would want. They essentially still give the Westminster Government a veto over the ability of the devolved Governments to legislate within devolved competency, so these are very meagre proposals. In refusing to accept even these proposals, is not the true nature of the Bill revealing itself? It is the British Government’s intention to use the Bill to impose uniformity over Wales and Scotland.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

The purpose of the Bill has been from the start and remains to give businesses certainty as we leave the transition phase—to have one single internal market.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Energy and Climate Change)

The Minister spoke about certainty for business. Can he give an example of something that he thinks would fall in these exclusions that would cause widespread panic in businesses in the UK?

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

The hon. Gentleman needs to speak to Scottish businesses more to see that they are concerned. They want to have the Bill in place to have the certainty, with 17 days to go until the end of the transition phase.

It is important to reiterate that the common frameworks are processes, not outcomes, and therefore broad exclusions are not suitable in this legislation. That leads me to amendments 1F, 1G, 1H, 1J, 1K and 1L. The common frameworks programme facilitates a conversation about a common approach and thus provides for consensus-based decision making in sectoral areas of the economy. However, it is neither the purpose nor in the purview of common frameworks to determine whether matters should or should not be in the scope of the market access principles. It is only right that the UK Parliament and parliamentarians from across the UK have the final say on this matter.

The Government also believe that the system that they have designed creates a proper balance between the independent operation of devolved powers and the automatic application of the principles that protect the market and give certainty.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

My hon. Friend has quite properly said that it is a matter for Parliament to make these judgments. As Chair of the European Scrutiny Committee, I had hoped that the Chancellor of the Duchy of Lancaster would come before my Committee. The Standing Orders quite clearly give us the right to examine questions relating to matters that are politically or legally important, and to report to Parliament accordingly. The problem that we have is that he has declined to do so three times in response to our written requests, and now this morning I have heard that he is not going to appear before the Committee. Would the Minister be kind enough to take that back where it belongs?

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London) 2:15, 15 December 2020

I am sure that my right hon. Friend the Chancellor of the Duchy of Lancaster will have heard the message from the Chair of the Committee and his clear steer. It has been said many times in this House and in the other place, but it is worth stating again the Government’s commitment to the common frameworks programme. We attach enormous value to the forums that they provide for collaborative working with the devolved Administrations.

Photo of Pete Wishart Pete Wishart Chair, Scottish Affairs Committee, Shadow SNP Spokesperson (Constitution), Shadow SNP Spokesperson (Cabinet Office), Chair, Scottish Affairs Committee

The Minister talks about consensus and involving the devolved Administrations. This is the opposite of consensus and agreement; it is imposition and constraint. These Lords amendments were his last chance to get this right. He has failed to do so. Will he now impose his will on the devolved Assemblies of the United Kingdom and force this Bill through the House?

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I am glad that the hon. Gentleman thinks that I can force my will through both this House and the other place. What we have done throughout is to seek to collaborate. We continue to seek to collaborate on both the common frameworks and the internal market as we move forward. I hope that the Scottish Government will come with us on that journey, but the common frameworks process is just that—a process for agreeing and managing policy divergence in a variety of specific policy areas. As such, the programme is primarily concerned with ways of working, rather than determining policy outcomes.

The common frameworks programme will put in place durable arrangements for the intergovernmental working between the Government and the devolved Administrations in the policy areas covered by individual common frameworks. Those clearly defined ways of working will lend themselves to the common frameworks programme, and the individual common frameworks of which it is comprised are being considered as part of the business as usual discussions that will take place in our future intergovernmental relations infrastructure, and will benefit accordingly. Our intention is that these mechanisms for sector-specific co-operation will allow for coherent policy making between the UK Government and the devolved Administrations in those policy areas. I therefore ask the House to disagree with amendments 1F, 1G, 1H, 1J, 1K and 1L, and to vote instead to provide certainty for businesses.

Amendment 8M would cut across the Government’s objectives, and leave businesses exposed to new burdens and barriers. Despite a reduced list of aims, very broad areas of public policy could be excluded from the market access principles. Alongside the problems posed by the areas suggested for exclusion, there is a more fundamental issue with the approach taken. To be excluded under the approach proposed in the amendment, a requirement must only “make a contribution to” the achievement of one of the aims from the list, meaning that a policy need only have a tangential relationship to a social policy objective to be taken out of scope. The amendment would also lead to uncertainty as to when the market access principles apply, not least by a very unusual use of the term “proportionate”. It would fall to the courts to determine the relative extent to which different policies meet one of the aims, with no consideration of the burdens introduced. This will not deliver the certainty that business needs.

In addition, I want to stress one point that I feel has sometimes been overlooked. Market access principles do not prevent the devolved Administrations from introducing innovative policies designed to meet their own goals and objectives, including those relating to the environment and public health. They can do so in the context of mutual recognition, which is necessary to protect the free flow of goods around the UK. Without this, we would see a decrease in consumer choice, increased prices and additional costs for businesses. I do not believe that anyone in either House would support such an outcome, nor is it in the interests of business or our constituents. I have constantly heard claims in this House and the other place that the Bill would prevent charges on single-use plastics in Wales, for example. That is categorically not true, as the Government have repeatedly made clear across both Houses.

Manner of sales policies, which have typically been the most innovative types of policies, will not be impacted by the market access principles, as long as they do not discriminate and are not designed artificially to circumvent mutual recognition. This covers innovative policies such as plastic bag charging and minimum unit alcohol pricing. The Bill is also clear that the devolved Administrations would no longer need to notify and justify new measures to the EU Commission when they want to innovate and try new policies. What they will not be able to do is erect harmful and unwanted trade barriers between other parts of the UK. I therefore call on the House to support the Government and disagree with amendment 8M.

I end by saying that the other place, as is their right as a revising Chamber, asked the Government and the House to reflect on their approach. The Government have carefully considered the arguments put forward by hon. Members, right hon. Members and Lords across both Houses, and we have come to agreement on reasonable proposals in some areas. However, the Government cannot agree to these amendments as they stand.

I appreciate the constructive approach that peers in the other place have taken in discussions with Government, and we will continue to engage and find common ground. However, I am afraid that these amendments as drafted still do not provide the certainty that businesses need. I therefore call upon the House to support the Government and provide the clarity that our businesses need and, ultimately, preserve the UK internal market, which has been the engine of growth and prosperity for centuries.

Photo of Lucy Powell Lucy Powell Shadow Minister (Business, Energy and Industrial Strategy)

I rise to uphold the Lords amendments that we are discussing today. It is a pleasure to be back at the Dispatch Box, given that I have been cooped up at home self-isolating, having been pinged. I was not pinged as part of this ping-pong though; I was in fact pinged by the coronavirus app, so I was not here last week. I put on record my thanks to my boss, my right hon. Friend Edward Miliband, who deputised for me on these occasions last week—and did so incredibly well, I hasten to add.

As ever, my right hon. Friend made a strong case against the Government’s United Kingdom Internal Market Bill, which has been poorly drafted from the outset. Without the Lords amendments we are debating today, the Bill poses a real threat to the future of our United Kingdom. Even though I was not here last week, it does feel a bit like we have been in suspended animation with this Bill. I appreciate there have been welcome changes in the meantime as a result of the Government dropping part 5, but it still, I am afraid, feels a bit like groundhog day. Here we are, yet again asking where the oven-ready deal is for Brexit. We are still asking the same questions on market access principles. We are still seeking the same recognition in the Bill of the devolution settlement through the common frameworks process. As with every other groundhog day where we have been debating this Bill, we will soon be hearing from Sir William Cash.

Photo of Liz Saville-Roberts Liz Saville-Roberts Shadow PC Spokesperson (Home Affairs), Shadow PC Spokesperson (Women and Equalities) , Plaid Cymru Westminster Leader, Shadow PC Spokesperson (Justice), Shadow PC Spokesperson (Business, Energy and Industrial Strategy), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Attorney General)

I am sure that the shadow Minister agrees that the Bill is a disaster for devolution, but let us just focus on financial powers and state aids, because Labour abstained on those amendments in the Lords yesterday, despite there being no meaningful safeguards in the Bill. How does she explain why her party in the other place saw fit to throw the Labour Welsh Government under the proverbial Tory bus, rather than seek even minimum safeguards to devolved powers in these areas?

Photo of Lucy Powell Lucy Powell Shadow Minister (Business, Energy and Industrial Strategy)

I disagree with the point that the right hon. Lady makes. We have been making the weather on the Bill, both in this place and the other place, which I will come on to discuss. We have been seeking safeguards for consent from the devolved Administrations when it comes to financial assistance powers. Now that we are trapped in groundhog day, perhaps today and tomorrow will be the moment when the Government listen and take on board some of the amendments from the other place.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

The question of state aids very much lies at the heart of much of these debates. Does the hon. Lady accept that the EU state aid rules are a racket? I know very well the areas around Sheffield, Yorkshire and the midlands, where the coal and steel communities were destroyed, effectively, by the application and the discrimination that was made against—[Interruption.] And in Scotland. Does she accept that is why we need our own sovereign state aid rules, as I said yesterday on the Floor of the House?

Photo of Lucy Powell Lucy Powell Shadow Minister (Business, Energy and Industrial Strategy)

It would be really nice if the Government used the powers that they already have, let alone those that it will soon acquire, to invest once and for all in British industry and British manufacturing. I am afraid that the Conservative Government do not have a great record when it comes to supporting our industrial heartlands, and that is plain for everyone to see.

I hope the Government will take on board the amendments from the other place, especially those in the name of Lord Hope and Lord Stevenson,  which have received clear support on each occasion.

In normal times it would be Christmas party season—I am sure we will debate that again at some point—but the Government’s hokey-cokey on the Bill really needs to end. We had part 5 in; now we have part 5 out. We were told the Bill would create a thriving internal market that would strengthen the Union and keep Scotland in, yet the reality is that it could lead to Scotland being out—something that Members on both sides of the House do not want to happen. The Government have been shaking it all about with the legislative games they have been playing in respect of the Bill, and I am not sure that has been good for anybody. I really hope that we can now see the end to some of these shenanigans.

On the amendments, I will not rehearse the arguments: we have heard them put eloquently by their lordships and Members of this House on previous occasions. [Interruption.] Sorry, did somebody want to intervene? Or is Joanna Cherry just trying to sledge me from behind? Just the usual.

Photo of Lucy Powell Lucy Powell Shadow Minister (Business, Energy and Industrial Strategy)

Yes, I will give way, if the hon. and learned Lady has something she wants to say.

Photo of Joanna Cherry Joanna Cherry Shadow SNP Spokesperson (Justice and Home Affairs), Shadow SNP Spokesperson (Justice), Shadow SNP Spokesperson (Home Affairs)

I have got something useful to say: why did the Labour party abstain on the amendment in the House of Lords that would have re-reserved state aid? Devolution is Labour’s baby—it was the late Donald Dewar who devolved state aid—so why did her party abstain on that? I think the people of Scotland would like an answer.

Photo of Lucy Powell Lucy Powell Shadow Minister (Business, Energy and Industrial Strategy)

We have worked incredibly hard to maintain the devolution settlement through the Bill; that is not something that the hon. and learned Lady’s party want to do. The SNP wants to use measures in the Bill to break up the Union and seek independence in Scotland. That is not something that we agree with. We have tabled amendments and voted on them to ensure that the devolution settlement in this country is respected, and I hope that the Government will continue to talk to us about that.

We welcome the Government concessions so far and are hopeful that with some more good will we can get some more recognition of common frameworks in the Bill in these late stages of ping-pong. The Lords amendments to strengthen the common-frameworks approach and fair access to the market are good ones that we will vote to uphold today. I am grateful to Ministers and Lords colleagues, especially Lord Hope and others, for their continued engagement on this issue, because there is a lot of agreement between us. Ministers are rightly proud of the common frameworks process, which has brought about a number of areas of agreement on standards and market access because it involves the Government working with the devolved Administrations. It is an approach that both Front-Bench teams agree on.

We also agree—unlike the SNP—that the UK Parliament should be the ultimate arbiter of the internal market, and we agree that no one nation should be able to frustrate that process, that all must act in good faith before the UK Parliament intervenes, and that safeguards should be in place to make sure that that is the case. It really feels to me like the Government could move further on this issue, because there is a huge amount of common ground. We need to see in the Bill a recognition of the common frameworks process and the devolution settlement that it represents, which is why I hope and expect that in returning the Bill to the other place today, the Government will introduce some final amendments along those lines. If they do so, they could receive broad support. It did not need to take quite so many iterations and pleas from both Houses, had the Government not taken such a hostile, blunderbuss approach with the Bill in the first place.

Photo of Lucy Powell Lucy Powell Shadow Minister (Business, Energy and Industrial Strategy)

No, I am afraid I will not; I am finishing.

I sincerely hope that the Government will reflect on that approach in future.

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

I have already made my point about the European Scrutiny Committee. I would now like to turn quickly to the issues that face us in these negotiations, because what is going on in the Bill is mirrored by the negotiations. We have not yet had a draft treaty text in black and white. We need to see it. We wish the negotiators well. As far as I am concerned, along with my colleagues who support my propositions, it is essential that we get this right, because it is about our national interests and the future of this country.

Under article 10 of the Northern Ireland protocol, the UK is forced to align to a dynamic list of EU state aid rules “as amended or replaced” in the future. The UK is not given any mechanism to address concerns about subsidies granted by EU member states to EU companies. This system is both unilateral and controlled by the EU alone. It is a racket. Under article 12 of the protocol, enforcement and supervision power is granted to the EU Commission and the European Court of Justice so that the UK-EU dispute resolution system, which is within the framework of the Joint Committee—the Committee is supposed to be run by the Chancellor of the Duchy of Lancaster, who I wish well, if he can only get this right; we will wait and see—would not be impartial, for only the EU’s Court would judge disputes, contrary to international practice. That means requiring the UK to follow current and future EU state aid rules made by the European Commission by an undemocratic vote in the Council of Ministers behind closed doors, with no transcript and without our even being at the seat of the Council. That is a direct infringement of UK sovereignty.

State aid rules under EU law are much wider than traditional subsidies and include anything conferring effectively a competitive advantage. They include tax, tax rules, tax reliefs, taxation measures for particular sectors or undertakings, bank bail-outs, gas tariffs for horticulture, structure of airport landing fees, private health insurance, the issuing of carbon trading emission certificates for free and failing to follow public procurement procedures—the list is endless.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit) 2:30, 15 December 2020

I am glad that the hon. Member has highlighted the role that the EU would have in state aid, not only in Northern Ireland but in Scotland, Wales and England where those firms have any connection with Northern Ireland. Does he therefore find it surprising that, while Opposition parties have been complaining about state aid rules not being devolved to them, they are quite happy to have the EU plunder through any support given to industries in their own country?

Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

They do not have a clue. They are going to get clobbered—they really will—and they do not get it. They just want to go on about devolution without regard to the effect that all this will have. I entirely agree with the right hon. Gentleman.

The Bill itself defines aid with reference to EU law—it refers to article 107 of the treaty on the functioning of the European Union. This is something that we will be affected by, because that amendment is not sufficient to enable us to maintain our sovereignty on all the matters relating to state aid rules. I look to the Prime Minister, I look to the Chancellor of the Duchy of Lancaster, and I look to the Government and the negotiators to get this right. This is the moment to do it. We are at a crucial moment. I trust the Prime Minister. I believe he will deliver. He said he will, and we will hold him to that promise.

It would go against UK national interest to accept EU demands of agreeing to legally binding commitments to mirror the EU state aid regime, given that EU state aid rules are created on the basis of objectives of common interest of EU member states, which no longer includes the UK, and are tested by the Commission on the basis of compatibility criteria that it has developed. They are non-binding guidelines, and therefore they can be changed at will. Under article 132 of the protocol and article 174 of the withdrawal agreement, provisions of the withdrawal agreement and the protocol referring to EU law or to EU law concepts or provisions are to be

“interpreted in conformity with the relevant case law of the Court of Justice of the European Union.”

That duty continues beyond the end of the transition period on 31 December and includes European case law handed down after the end of that period.

There is a real problem here. This is down to the negotiators as well as to those who are responsible for this Bill. We are faced with a very difficult situation, which impinges on our sovereignty and on our necessity to avoid, indeed to prevent, EU state aid rules from continuing to apply to the United Kingdom. This is a crucial moment in our economic, political and constitutional history. We must maintain the sovereignty of the United Kingdom. That is the message that I send to the Government and I trust that the Government and the Prime Minister will deliver it.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

This is what is going to happen. This debate has to finish at 3.10. I want to bring in the Minister at 3.06 to wind up. A lot of hon. and right hon. Members have been sitting in the Chamber from the beginning of the debate. If others come in and intervene, it does take time from those who have been trying to participate and have put their names down to participate. Before I bring in the SNP spokesperson, I have to say that I will now have to reduce the time limit to three minutes and, with that, I still may not get everybody in, so if colleagues want to take fewer than three minutes, I am sure that it would be appreciated by others.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

Thank you, Madam Deputy Speaker. I will do my utmost to whizz through what I can here.

We welcome the Lords amendments seeking to protect both the devolved settlements and the policy divergence across the nations of the UK, but we also know that the Prime Minister and his Tory Government simply detest devolution. All pretence otherwise has been swept away by this Bill, as it puts into action the casual contempt that they have.

The Prime Minister, as we know, believes that devolution is a disaster. Well, we think the same about him. Last night, however, in the Lords, Labour opened the door for the Tories, as they hollowed out devolution, withdrawing support for Lord Thomas’s amendments that challenged the UK Government’s clauses on direct spending in devolved areas. Equally disappointing was Labour’s abstention on the vote for the amendment of Baroness Llandaff to halt the brazen power grab on re-reserving state aid. This is not currently reserved. It is not listed in the reserved powers under schedule 5 to the Scotland Act 1998. It is a devolved power being grabbed back, along with the measures in this Bill in place to overrule decisions taken in Scotland.

I have been quoting absolutely committed Unionists in the other place throughout this debate, and I am grateful to be able to quote them again today. Lord Thomas said:

“The power to control state aid is not reserved. If it were, these amendments would be unnecessary…I ask why the UK Government would not work together with them, consult them before the Bill was produced and try to find a common solution…I fear it is an example of Westminster saying that it knows best, rather than working with the devolved Administrations.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1486.]

But once again, the Labour Front-Bench team took weak words from the Government as assurances and chose to abstain on that important measure.

Lord Stevenson’s amendment alters schedule 1 so that environmental standards and public health are exempt from market access principles. He warned the UK Government not to make

“the market access principles, which operate automatically, too narrow and too prescriptive. That would fatally undermine the opportunities for devolved Administrations to diverge”.—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1457.]

Baroness Bennett highlighted that much leadership on climate change has actually originated from the devolved Governments. Lord Hope explained that his amendments seek to ensure that the UK Government’s commitment to market access principles do not undermine the UK Government’s commitment on the common frameworks. On policy divergence, he warns:

“As the Bill stands, a measure that gives effect to an agreed decision to diverge can be ignored by traders bringing goods in from other areas. This undermines the opportunity to diverge, rendering it worthless and ineffective.—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1446.]

Baroness Hayter of Kentish Town provided this summary:

“When the case for Brexit was all about ‘taking back control’, we failed to understand that the Government meant taking control to themselves, even over issues that were fully devolved.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1447.]

Time and again, across all the nations of the UK, across all parties and none, and across all the affected industries, trade bodies, academia and the legal profession, this Tory Government have been told that the Bill grabs power from devolution and places it here in Westminster. The Bill allows UK Ministers to control spending in devolved areas of economic development, infrastructure, cultural activities, regional development, education, water, power, gas, telecoms, railways, health, housing and justice. The people of Scotland did not vote for the Tories to make these decisions at Westminster. Madam Deputy Speaker, you are far too young to remember the last time the people of Scotland did that, although your grandparents might just have—but only just!

This Bill was born bad to the bone, setting to break international law and break devolution. The Government have been forced to drop some of it, but it remains an aberration and continues its assault on devolution, Scottish public services and public life. The Scottish public, unlike this Government, are listening and watching. They will choose their own path to protect their Parliament and democracy in the near future.

Photo of Wendy Chamberlain Wendy Chamberlain Liberal Democrat Spokesperson (Wales), Liberal Democrat Spokesperson (Scotland), Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Work and Pensions)

So here we are again. I am glad that the Lords have continued to press their points on the common frameworks and the impact of the Bill on the devolved Administrations. The Lords seem to understand that the Bill poses a great threat to the devolution settlement, so I cannot understand why the Government do not even accept the damage that this Bill has caused in the devolved nations. We are told by the Minister that it is not a political Bill. It is almost laughable. I wish the Government would just be honest with us. If they want to have a debate about the merits of devolution, many Members, not just on this side of the House, would be willing to argue in its favour. The Minister would also do well to remember that it was not the Scottish National party that brought about devolution in Scotland in the first place.

A case in point of the Government’s failure to own up to the impact of this Bill on devolution can be seen with the amendments that have been brought by the Lords on the common frameworks. Last week, I raised the question of what the Bill was for, in situations where common frameworks were already in place. I again ask the Minister to address that question. There is a huge hole in the Government’s argument, and they have left that question unanswered. There is also a real question about the interaction of the Bill with any potential EU trade deal, and I urge the Minister to address this. If we reach agreement with the EU on regulatory standards, which I hope we do, what will become of those clauses of the Bill on standards and frameworks? Will they ever come into effect, or will they become obsolete, with future standards being the subject of regulatory alignment with the EU? If the answer is the latter, I hope the Government will reflect on what this has all been for, and whether it has been worth it.

The Bill had two main aspects. The first was the part that broke international law, which was removed last week. That part of the Bill has resulted in huge damage to our international standing. It was reported this weekend that the serious mistrust sown as a result of those clauses has been a significant barrier to getting the trade deal that the Government claim they want. It has caused huge disquiet among our allies, including President-elect Biden. All that, for clauses that will never even reach the statute book.

Then we have the parts of the Bill that impact the devolution settlement. Those clauses will reach the statute book, but if there is a deal, it is likely that they will have no practical effect. However, the damage has already been done. This has caused deep dismay to the people of Scotland, Wales and Northern Ireland and given those SNP Members sitting around me grist to their mill. Congratulations! This is what you might call a PR nightmare for the United Kingdom and for the Union. Although in many respects it is already too late, I urge the Minister to accept the Lords amendments and finally deliver some form of limited consensus on this Bill.

Photo of Deidre Brock Deidre Brock Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Environment, Food and Rural Affairs)

Most of us here in the Chamber recognise that Brexit is an exercise in self-harm, and this Bill is an attempt to ensure that no one escapes that harm, no matter how sensible they are. No one will be safe from English Government decisions—and they will be English Government decisions because, as Professor Michael Keating notes in his excellent paper on the United Kingdom Internal Market Bill:

“In the UK, England has 85 per cent of the population so…it will be English standards, set by the UK Government, that prevail.”

So no one will be safe from the English Government’s decision to impose lower safety standards on food, electrical appliances or kids bikes, or on personal protective equipment for the NHS that has been produced by some ministerial crony with no experience in that field at all.

These Lords amendments, which are sadly ever-diminishing in strength, will none the less provide some small protections, because the Bill as it stands allows a Prime Minister sitting in Downing Street to casually cast aside the concerns of the Scots and the Welsh as he sells out safety for the sake of some second-rate trade deal. Consumer protection is being discarded by the scorched-earth shenanigans being pursued by this UK Government. Perhaps it is more fire sale than scorched earth, with the protections that consumers—our constituents—value so highly being sold so cheaply.

Farmers already know that their livelihoods are being thrown into the gutter by the abandonment of any pretence of protecting food standards. They know that England’s shift from farm subsidies for food production will adversely affect England’s farmers and indirectly threaten Scotland’s ability to support farmers. We all know that the courts will be busy with a procession of spivs seeking to remove protections so that they can make cash. What we can see will be disastrous; what we cannot yet see may be even worse.

The Governments of Scotland and Wales know that the Bill spells danger for the citizens of their countries. The Senedd and the Scottish Parliament have similarly made it clear that it is not acceptable; both Parliaments withheld legislative consent and made it clear that it will be damaging to them and to the people they serve.

The Lords amendments bring some—just some—semblance of decency to the Bill, some recognition of the political landscape across these islands, and some indication that there are differing politics in the different nations. They allow a mechanism for divergence from the centralised control of market forces and the lowest common denominator approach that the Government have taken. The institution of a framework for agreeing divergence of standards would at least allow some hope of protection being maintained and of avoiding bleached chicken and GM crops. I suspect that will be a weak protection, but any protection against the vagaries of a windblown Prime Minister and Government would be a step in the right direction.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Energy and Climate Change) 2:45, 15 December 2020

The Lords have tried to improve the Bill, but it has been subject to only minor improvements. I wish that, during ping-pong, the Lords had done double insistence and brought down the whole rotten Bill. That is what is really needed—for it to go away and be brought back in a completely different form.

It is no wonder that the Government have been so pig-headed about rejecting these amendments. As we have heard, last night in the Lords, Labour—the self-styled party of devolution—gave up the key fundamentals and principles of devolution. It gave up on direct spending and on state aid, which drives a coach and horses through the whole devolution settlement. It gives Westminster carte blanche to do what it wants in Scotland and Wales, where there is a Welsh Labour Government. Labour has given up on its own Government in Wales.

When summing up in last night’s debate, Lord Thomas said that the one thing he was holding on to was the thought of

“the catastrophic result for our union if the Government did not adhere to the principles that have been explained”.—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1480.]

Basically, he hopes that the Tory Government will do the right thing. If not, that will bring down his precious Union. It seems that Labour is now relying on this right-wing Tory Government to do the right thing with the precious Union—good luck there.

On Lords amendment 1F, the Government have already refused to adhere to the common frameworks principle and enshrine that in the Bill as a way for the devolved nations to co-operate. The amendment massively waters down that principle, but it would prevent divergence on harmonised rules that have been agreed through the common frameworks. Why do the Government want to reject that? If there is agreement between the nations, and common frameworks with agreed rules and regulations, why do the Government reject that that is something to be protected? That tells us everything we need to know about what they think of devolution.

It has been said many times, but it is worth repeating. The Prime Minister has said:

“A pound spent in Croydon is of far more value to the country than a pound spent in Strathclyde.”

Who is kidding who if we think that this Tory Government, under that Prime Minister, are suddenly going to spend lots of money in Scotland and Wales for our benefit? It is a joke and it undermines their whole attitude to devolution.

On state aid and Lords amendment 8M, why do the Government want to reject protection of environmental standards and of public health? Why should those things be excluded from the simple protection of state aid? Again, that tells us all we need to know about what they think of devolution. What Lord Thomas says is going to happen: the Union will end.

Photo of Joanna Cherry Joanna Cherry Shadow SNP Spokesperson (Justice and Home Affairs), Shadow SNP Spokesperson (Justice), Shadow SNP Spokesperson (Home Affairs)

I support the Lords amendments because they seek to protect the devolved settlements and also policy divergence across the United Kingdom. Lord Hope’s amendment attempts to salvage the common frameworks process and to prevent this UK Government from giving themselves the power to override policy divergence in devolved areas. As Lord Hope himself said:

“It was because of devolution that the common frameworks process, and the opportunity for policy divergence, was instituted with the encouragement of the UK Government in the first place. Their support for that process must involve support for policy divergence too.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1446.]

He is quite right. Lord Stevenson’s amendment exempts environmental standards and public health from market access principles. In so doing, it also seeks to protect policy divergence. As Baroness Bennett pointed out in the Lords, the smaller nations of the United Kingdom have often led the way on environmental policy divergence and it would be a shame if that was to stop.

I am speaking with a sense of weariness and inevitability because we have all been here before and we all know what is going to happen today. We know that these amendments will be defeated by a Tory majority that does not represent the political reality on the ground in Scotland, or indeed Wales. Once more, the Minister will get to his feet and mouth meaningless platitudes about speaking to the devolved Administrations. Scotland did not vote for Brexit. Scotland did vote for devolution. It is anti-democratic that Brexit is being used to undermine devolution, and it is happening in breach of all the promises that were made to no voters in 2014, including the infamous vow, which included a promise from all three parties that the Scottish Parliament, as well as getting extensive new powers, would have the final say on spending in all devolved matters.

It is therefore a really sad state of affairs that the official Opposition could not field a single Back Bencher to speak up for devolution today. I know that they only have one hon. Member in Scotland, but they are not always averse to putting forward MPs from other parts of these islands to opine on Scottish affairs. Their no-show here today is not surprising, though, given that their colleagues in the Lords sat on their hands yesterday with regard to amendments seeking to keep state aid a devolved matter and Lord Thomas’s amendment challenging the Government’s clauses on direct spending in devolved areas. This is happening in direct breach of the vow that the then leader of the Labour party signed. But Labour does not care. It is happy to wheel out Gordon Brown to talk about federalism when independence is riding high, but when it comes to defending the existing devolved settlement, it is missing in action. This is a shameful state of affairs, and it falls to the SNP to defend devolution. We are doomed to fail, but that will simply further reinforce the case for independence.

Photo of Stephen Flynn Stephen Flynn Shadow SNP Deputy Spokesperson (Treasury - Financial Secretary)

I have to start by expressing my deepest sympathies to the shadow Minister, Lucy Powell, who has had to come to the House to try to defend the completely and utterly indefensible. [Interruption.] She says that she does not need my sympathy—well, she is getting it anyway. The reality is that the Labour party has once again turned its back on voters in Scotland. Last night Labour had the opportunity to stand up for the Scottish Parliament, to stand up for devolution and to block direct spending by this UK Government on devolved matters, and it sat on its hands. That is why there is a not a single Labour Back Bencher here in the Chamber this afternoon.

But my sympathies do not stop there: they also extend to the Minister himself. He talks about business certainty—business certainty! Four and a half years after the Brexit vote, after three Prime Ministers and two general elections, it is 17 days to the end of the transition period and the Minister could not name, in any way, shape or form, what the trade status of the United Kingdom is going to be. I pity them all. This is why the people of Scotland will choose a different path in the very near future.

Let us look at the Bill as it stands in a little more detail. It remains—it utterly remains—a blatant attack on devolution. For me, that is extremely frustrating, because, like my hon. Friend David Linden, I am young enough to have lived almost entirely under the Scottish Parliament. I do not remember a time when there was not a Scottish Parliament. It has been a positive, progressive force for Scotland that we are proud of. I am not going to come to this Chamber and let a party that has not won an election in Scotland since the 1950s dictate to the Scottish Parliament as to what will happen. It is a complete and utter shambles, and the Government should be utterly ashamed of that.

To finish, something that has been asked a lot in this Chamber—I have heard the shadow Scotland Office Minister say it as well—is, “Name a single power that is being grabbed. Name a single one”, but this is much bigger than that; this is a blatant, all-out attack on devolution itself. It seeks to undermine the very premise of devolution. To prove that very fact, The Press and Journal just four days ago said:

“The Secretary of State has been very clear he wants to deal direct with local authorities”— not just going beyond the Scottish Parliament or the Convention of Scottish Local Authorities, but going straight to the local authorities themselves. That is absurd and a blatant attack on devolution, and we will not stand for it.

Photo of Tim Farron Tim Farron Liberal Democrat Spokesperson (Environment, Food and Rural Affairs), Liberal Democrat Lords Spokesperson (Communities and Local Government), Liberal Democrat Spokesperson (Housing, Communities and Local Government)

I am overwhelmed by a sense of déjà vu, with the Labour Front Bench getting more grief than the Treasury Front Bench, as back in the day. I am also overwhelmed with a sense of déjà vu because I feel a great sense of this Government being in the same place—in my heart, in my mind—as the European Commission once was. Back in the days when we were not little Britain, I remember feeling enormous frustration and anger with the European Commission when it would do stupid things, in particular with agriculture, playing into the hands of separatists who only wanted the end of our relationship with the European Union.

I feel exactly the same about this Government now playing into the hands of my friends and colleagues around me on the SNP Benches—to whom this is music to their ears—by undermining the Union and being cloth-eared in the process. The Minister has had every chance to accept Lords amendments and to do what he can to stand behind the integrity of the Union and of the devolution settlement.

I have another great concern. I mentioned agriculture a minute ago, and what is critical in the race to the bottom that is built into the Bill when it comes to standards of farming, animal welfare and the environment is something that is not restricted to the Bill alone; it is something that the Government are repeating in other areas of their approach. We have seen the failure of the Government to accept proposals from my party and others that the high standards of British animal welfare and our environmental standards should be written into all new trade deals, but those were refused at every turn—clearly preparing the way to sell out farmers in all corners of the United Kingdom at the first chance the Government get in any trade deal.

At the same time, although most of us in this House agree with the Government’s direction in terms of the English changes to farm payments—from basic payments to the environmental land management scheme—the plan has been to underfund the scheme and to bodge it, getting rid of the basic payments before the new payments are in place, therefore killing off English family farms, which are the unit that allows us to have high-quality animal welfare and environmental standards. All those things together paint a picture of a Government who have lost touch with the countryside and with agriculture, and are prepared to set out a range of policies—almost a manifesto, a catalogue, of attacks on British farming—that undermine our standards, animal welfare and the quality of our produce, and to sell our farmers down the river.

I am proud of the quality of British farming, throughout these islands, and I want the standards that are the highest in any nation to be the highest across all four. I would love the Government to learn from the mistakes of the European Commission—not to play into the hands of separatists, but to make sure that they defend our Union and the devolution settlement.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury)

We are clear on the SNP Benches that Scotland does not want this Bill and that it overrides powers within the Scotland Act 1998. The explanatory notes state:

“The Bill’s provisions replace the existing limits on the effect of legislation made in exercise of devolved legislative or executive competence”.

The Bill is clear about taking new powers.

We know that divergence will not be tolerated, because it is not tolerated currently. In immigration policy, Scotland has been refused any degree of control. On the control and sale of fireworks, we have been ignored in our request to regulate fireworks. In the treatment of drug law, an area close to my heart and that of my constituents, despite crying out for years in the face of a drugs-death crisis—a crisis which last year saw 1,264 souls lost—the UK Government say that Scotland will not be permitted, not allowed, not trusted to take further action to prevent the deaths of our citizens. Scotland accepts responsibility in the areas where we can act, and we know we must do more, but we do it with our hands tied behind our back. I do not trust this Government to behave any differently when they grasp with grubby hands Scotland’s powers over economic development and infrastructure, such as our water supply, our transport, our health or our education. The only way to protect the powers of our own Parliament is for Scotland to vote for independence.

Photo of David Linden David Linden Shadow SNP Spokesperson (Housing, Communities and Local Government) 3:00, 15 December 2020

It is an honour to follow my constituency neighbour, my hon. Friend Alison Thewliss. Like other hon. Members on the SNP Benches, I welcome the amendments from their lordships to try to protect the devolved settlements from policy divergence across the UK. However, it strikes me as a rather bizarre state of affairs that we are desperately relying on the unelected and democratically illegitimate House of Lords to defend devolution and democracy. That irony is not lost on me, but I will return to that just a little bit later.

I rise today to speak in favour of Lord Hope of Craighead’s amendment on the common framework; I remain enormously frustrated that the Government are opposing it in this House in order to protect their grubby power grab on the devolved legislatures. Of course, that should not come as a surprise to the House: not only did this British Tory Government campaign against devolution in 1997, but they actively loathe it even now, and make no attempt to hide that view.

We have a Prime Minister who told his Back Benchers that devolution was “a disaster” and that devolving power was Tony Blair’s “biggest mistake”, which will certainly come as a surprise to those of us who opposed the war in Iraq. However, it is not just the Prime Minister who holds that anti-devolution view; it runs all the way through this Bill. The Leader of the House and Lord President of the Council is also on record as saying that,

“constitutional tinkering has weakened our Parliament and has helped to divide the United Kingdom”—[Official Report, 26 November 2020; Vol. 684, c. 989.].

I would argue that the Government do not need much help with that, frankly.

We are where we are, and that is why I support the amendment to the Bill made by Lord Hope. We should not be surprised by the Tories’ anti-devolution rhetoric, but I must say I was surprised and disappointed to see the British Labour party withdraw its support for Lord Thomas’s amendment, which challenged clauses on direct spending in devolved areas. Perhaps it is a sign of just how out of touch the Labour party has become that Lord Stevenson, speaking for his party in the Lords last night, said that,

“the points made by the Minister on the shared prosperity fund were sufficient to ensure that we do not need to go back over this again. It is not our view, as Her Majesty’s loyal Opposition, that we need to divide the House on this issue again.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1476.]

It is hard—really hard—to imagine a giant such as Donald Dewar, for example, uttering those words in Westminster, but they reaffirm my belief that this place and its two biggest parties cannot be trusted to protect our devolved institutions. Perhaps that is why, yesterday, we saw the 16th poll in a row showing majority support for Scottish independence. Alongside my colleagues this afternoon, I will vote for the amendments, but the only way to truly empower the Scottish Parliament is with independence, not with Lords amendments. Scottish independence is only a case of when, not if, and I suspect the Minister knows that too.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I am grateful for the forbearance of colleagues who have brought this debate to a relatively short end. I will not detain them for too long; I just want to thank everybody who has spoken today.

It is a shame that a number of the speeches veered from the amendments that we are considering today, but it was somewhat predictable. We are debating devolution, but in reality a number of hon. Members talked about independence, without using the word—I think in SNP bingo the word independence came up only once. The sentiment was that they are using this Bill to further their ambitions for independence, rather than concentrating on respecting the devolved Administrations through devolution and common frameworks.

We have before us today’s amendments, which the Lords considered and voted on, yet much of the debate was about yesterday’s amendments and an attack on the Labour party. I appreciate the opening words from Lucy Powell, that it is important that we keep on talking to get this important Bill through, so that we can give businesses certainty.

Photo of David Linden David Linden Shadow SNP Spokesperson (Housing, Communities and Local Government)

I do not want to intervene on this love-in of the Better Together alliance, but the Minister spoke earlier about using the United Kingdom Internal Market Bill to divide the United Kingdom. Actually, opinion polling has shown a clear trajectory in terms of Scottish independence—16 polls in a row. Why does he think that is?

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I am not sure which amendment the hon. Gentleman is speaking to, but I note that the last poll was 52:48, which I am sure he will talk about; it seems to be a figure that keeps coming up.

Why do we need to give businesses certainty? This is not just about Northern Ireland, Wales and England; it is about Scottish business too. Some 60% of Scotland’s trade—more than £50 billion—is with the rest of the UK. Up to half a million jobs are dependent on that internal trade.

Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

On that statistic about Scotland’s exports, will the Minister concede that 62% of manufactured exports from Scotland go outwith the UK, to the EU and the rest of the world?

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

That refers to the 144,000 jobs, as I am sure the hon. Gentleman would say, which were considered by the same institute that came up with the half a million jobs dependent on internal trade. He talks about the manufacturing trade; that is why we are better together as a United Kingdom. We have the whole gamut of skills, whether it is in manufacturing, services, culture, financial services or legal services—all those areas that we can provide as the UK which will make us a force to be reckoned with as we come out as one global Britain, with the opportunities that we will afford ourselves, in 17 days’ time.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I will not, because I need to bring my remarks to a close.

The Government will continue to be reasonable in discussions on the Bill. We have made great progress so far in both Houses on finding areas of agreement—on what brings us together as one UK as we look to leave. I appreciate the constructive approach that peers in the other place have taken in discussions with the Government. We will continue to engage and to find that common ground, but we assess at the moment that the amendments proposed by the other place continue to go too far and run counter to the certainty that the Bill provides and that businesses need.

As we have made clear before, this Bill is vital in preserving our internal market and continuing to provide certainty for businesses as we seek to recover from covid-19, prepare for the opportunities after the transition period and protect jobs. I therefore call on the House to support the Government’s motion.

Question put, That this House disagrees with Lords amendments 1F, 1G, 1H, 1K, 1L and 8M.

Division number 187 United Kingdom Internal Market Bill — Exclusions from Market Access Principles

A majority of MPs voted against broader exemptions to the "market access principles" intended to ensure a free internal market within the United Kingdom, and not prioritise rules agreed by the four nations of the United Kingdom over those principles.

Aye: 362 MPs

No: 262 MPs

Aye: A-Z by last name


No: A-Z by last name


Absent: 22 MPs

Absent: A-Z by last name

The House divided: Ayes 362, Noes 262.

Question accordingly agreed to.


That this House disagrees with Lords amendments 1F, 1G, 1H, 1K, 1L and 8M.

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

Ordered, That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 1F, 1G, 1H, 1K, 1L and 8M;

That Paul Scully, Michael Tomlinson, Jo Gideon, Mark Fletcher, Gill Furniss, Lucy Powell and Drew Hendry be members of the Committee;

That Paul Scully be the Chair of the Committee;

That three be the quorum of the Committee.

That the Committee do withdraw immediately.—(Maria Caulfield.)

Committee to withdraw immediately; reasons to be reported and communicated to the Lords.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

In order to observe social distancing, the Reasons Committee will meet in Committee Room 12.

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.

Sitting suspended.