Devolution (Constitution Committee Reports) - Motion to Take Note

Part of the debate – in the House of Lords at 4:14 pm on 9th October 2017.

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Photo of Lord Jay of Ewelme Lord Jay of Ewelme Chair, EU Home Affairs Sub-Committee 4:14 pm, 9th October 2017

My Lords, I too am glad to welcome the Minister to the House and to the Dispatch Box, and I look forward to working with him over the months ahead. It is also a great pleasure to follow the noble Lord, Lord Lang of Monkton. I am delighted to pay tribute to the eloquence and passion, if I may say so, of his speech and to his committee for its series of thought-provoking analyses of devolution.

When the European Union Committee launched its inquiry into the impact of Brexit on the devolution settlements, we were acutely aware of the risk that we might stray into areas that are properly the domain of the Constitution Committee. We are therefore enormously grateful to the noble Lord, Lord Lang, and the members of his committee for sharing their thoughts with us. I hope that our report is not guilty of any constitutional faux pas.

The bewildering pace of events since the referendum means that many of us have found it hard to keep up. The noble Lord, Lord Lang, spoke of that, and the European Union Committee is no exception. We took the bulk of our evidence in February and March, but our plan to publish a report in the spring was forestalled by the general election. While the committee was considering its draft report in June and July, negotiations started in Brussels, and just two days after we agreed our report, on 11 July, the European Union (Withdrawal) Bill was published. Since that time, we have had position papers from both the Welsh and Scottish Governments, along with innumerable political interventions, and who knows what will happen in the coming weeks. Given that, rather than describing our report in detail, I shall concentrate on one or two key points before turning to more recent events, in particular the EU withdrawal Bill.

The first point I wish to make, on which we are at one with the Constitution Committee, is that EU membership has, since the devolved institutions were established in the late 1990s, been part of what the committee called the,

“glue holding the United Kingdom together”.

We have a free and open internal market within the United Kingdom largely because all parts of the UK fall within the European Union single market and are subject to the same European Union rules. Once we are out of the European Union, we will need, as the Government have stated and as our report acknowledges in paragraph 210, common frameworks to ensure that the United Kingdom internal market continues to function. I think we are all agreed on that. But the fundamental basis of the devolution settlements was an acknowledgement that the different nations of the United Kingdom have different needs and that they should be entitled to develop differentiated policies and laws to take account of those needs. As we set out in chapters 3 to 5 of our report, each of the devolved Administrations faces different challenges: Wales’s hill farming sector, for example, and its reliance on manufacturing; Scotland’s specific demographic needs; and the close integration of Northern Ireland’s economy with that of the Republic of Ireland. The common frameworks needed to maintain the integrity of the United Kingdom internal market after Brexit therefore also need to allow for differentiation, and the challenge which the Government seek to address by means of the European Union (Withdrawal) Bill is to maintain that balance to ensure both that the frameworks are in place to uphold the United Kingdom internal market and to respect the diverse interests and priorities of the different nations and regions that make up the United Kingdom.

There is huge complexity here, so in chapter 6 of our report we outline the interaction between the competences currently exercised by the European Union and those which are either devolved or reserved within our domestic devolution settlements. We note that some EU competences are already devolved, notably those relating to the environment, agriculture and fisheries. Many other EU competences are reserved, such as those relating to competition and state aid.

The central point underlying our analysis is that the domestic balance of competences is fully set out in the various Acts of Parliament which have established the devolved institutions. Parliament has thus taken a view in successive devolution Acts on what should be devolved and what should be reserved. For instance, Parliament decided that competition should be a reserved matter, but that environment should be devolved. That is why, in paragraph 237 of our report, we concluded:

“On the day of Brexit, competences … will, by default, be exercised in accordance with these pre-existing statutory provisions”.

The Government’s response to the committee’s conclusion, which we received last month and for which the committee is grateful, states:

“The UK Government is responsible for ensuring that the internal market within the UK operates freely and openly. Previously, European legislation has set the frameworks to guarantee that a consistent approach is taken across the UK … The powers currently held by the EU that provide that guarantee on the internal market are not, and never have been, within the competence of the devolved administrations”.

I find that rather opaque. I assume that the Government are referring to the acquis of single market legislation; but within that acquis, there is the bulk of EU environment legislation, which plays an important part in ensuring that the UK’s internal market operates freely and openly—yet responsibility for the environment has been explicitly devolved to Scotland, Wales and Northern Ireland by Parliament. So on what basis do the Government claim that such legislation has never been within the competence of the devolved Administrations? I do not fully understand the Government’s position.

That takes us to the heart of the current disagreement between the UK Government and the Scottish and Welsh Governments. I find much with which I agree in the Welsh and Scottish Governments’ memoranda. For instance, the Welsh Government state:

“Legislative competence for devolved matters which are currently subject to EU restrictions would remain with the devolved legislatures post-exit”.

That is essentially the same point that our report makes. I have yet to hear a convincing counterargument. Rather, the difficulty is with the Government’s position. As Mark Drakeford of the Welsh Government told us,

“some UK Ministers … believe that, when the European Union is not there, these powers will somehow be free-floating and that if they grab them first they will be able to make decisions and the devolved Administrations will have to live with those decisions”.

Mr Drakeford’s fears seem to have been realised in the EU withdrawal Bill, which not only confers extensive delegated powers on UK Ministers but proposes that once Ministers have used those powers to convert retained EU law into domestic law, the devolved legislatures will not be able to amend that law, even in areas that fall within their competence. The Government response to our report describes this as,

“a temporary measure that provides the necessary time and space for detailed discussion on whether common frameworks are needed and how they might operate”.

There is nothing temporary about the relevant clause, Clause 11, which, as the Welsh and Scottish Governments have pointed out, contains no sunset provision. As I understand it, Clause 11 of the EU withdrawal Bill will permanently curtail the power of the devolved legislatures to amend a vast array of laws affecting areas that Parliament has determined should fall within devolved competence. Instead, those laws will be made by UK Ministers, using delegated powers and potentially with little parliamentary oversight. If I have got that wrong, I am sure the Minister will put me right.

As I said at the outset, the committee agrees with the Prime Minister that common standards and frameworks will be needed to support the integrity of the UK internal market after we leave the EU; but we also believe, equally strongly, that:

“Any durable solution will need the consent of all the nations of the United Kingdom”.

That means dialogue, compromise and mutual respect.

The key conclusion in our report is that contained in paragraph 271:

“We call on the UK Government and the devolved Governments to work together to put in place the frameworks needed to ensure consistency at UK level, thereby preserving the integrity of the UK single market, while respecting national, regional and local diversity, and the autonomy of the devolved institutions”.

Of course time is short, but even if the Government were simply to add a sunset provision to Clause 11, all sides would have time to come together and reach a lasting agreement on the common standards needed to protect the UK’s internal market, which could then be implemented by the legislatures in London, Edinburgh, Cardiff and Belfast.

I do not know why the Government have not pursued that approach. Any attempt to use the EU withdrawal Bill to impose common frameworks on the nations of the United Kingdom against their will would contradict the principles that underpin the devolved settlements. Of course the politics, particularly between Whitehall and Edinburgh, are difficult. I will not pretend that securing agreement will be easy, but so much is at stake that all sides—led, I hope, by the Government—must surely make the effort. The Brexit negotiations are complex enough. The last thing we want is to create unnecessary difficulties, too, for the make-up of the United Kingdom.