Amendment 5

United Kingdom Internal Market Bill - Committee (1st Day) – in the House of Lords at 6:00 pm on 26th October 2020.

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Lord Hope of Craighead:

Moved by Lord Hope of Craighead

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.”

Photo of Lord Hope of Craighead Lord Hope of Craighead Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords), Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords)

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.

Photo of Baroness Finlay of Llandaff Baroness Finlay of Llandaff Deputy Chairman of Committees, Deputy Speaker (Lords) 6:15 pm, 26th October 2020

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.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Cabinet Office), Shadow Deputy Leader of the House of Lords, Shadow Minister (Business, Energy and Industrial Strategy) (Labour), Shadow Spokesperson (Digital, Culture, Media and Sport) (Charities), Shadow Spokesperson (Cabinet Office, Constitutional and Devolved issues) , Shadow Spokesperson (Wales) 6:30 pm, 26th October 2020

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?

Photo of Baroness Humphreys Baroness Humphreys Liberal Democrat Lords Spokesperson (Wales)

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.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

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.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 6:45 pm, 26th October 2020

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.

Photo of Lord Hain Lord Hain Labour

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.

7 pm

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.

Photo of Baroness Ritchie of Downpatrick Baroness Ritchie of Downpatrick Non-affiliated

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.

Photo of Baroness Altmann Baroness Altmann Conservative

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?

Photo of Baroness Suttie Baroness Suttie Liberal Democrat Lords Spokesperson (Northern Ireland)

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.

Photo of Lord Dunlop Lord Dunlop Conservative 7:15 pm, 26th October 2020

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.

Photo of Baroness Andrews Baroness Andrews Deputy Chairman of Committees, Deputy Speaker (Lords), Chair, Common Frameworks Scrutiny Committee, Chair, Common Frameworks Scrutiny Committee

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.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords) 7:30 pm, 26th October 2020

My Lords, the noble Lords, Lord Naseby and Lord Cormack, have withdrawn. I therefore call the next speaker, the noble Lord, Lord Rooker.

Photo of Lord Rooker Lord Rooker Labour

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.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

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?

Photo of Baroness Noakes Baroness Noakes Conservative

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.

Photo of Lord Vaux of Harrowden Lord Vaux of Harrowden Crossbench 7:45 pm, 26th October 2020

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.

Photo of The Duke of Montrose The Duke of Montrose Conservative

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.

Photo of Lord Bruce of Bennachie Lord Bruce of Bennachie Liberal Democrat Lords Spokesperson (Scotland)

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.

Sitting suspended.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Digital, Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy and International Trade) 8:40 pm, 26th October 2020

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.

Photo of Lord True Lord True Chair, Intergenerational Fairness and Provision Committee, Minister of State (Cabinet Office), Chair, Intergenerational Fairness and Provision Committee

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.

Photo of Baroness Morris of Bolton Baroness Morris of Bolton Deputy Chairman of Committees, Deputy Speaker (Lords) 9:00 pm, 26th October 2020

My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Bruce of Bennachie.

Photo of Lord Bruce of Bennachie Lord Bruce of Bennachie Liberal Democrat Lords Spokesperson (Scotland)

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?

Photo of Lord True Lord True Chair, Intergenerational Fairness and Provision Committee, Minister of State (Cabinet Office), Chair, Intergenerational Fairness and Provision Committee

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.

Photo of Lord Hope of Craighead Lord Hope of Craighead Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords), Chair, High Speed Rail (West Midlands - Crewe) Bill Select Committee (Lords)

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.

Photo of Baroness Morris of Bolton Baroness Morris of Bolton Deputy Chairman of Committees, Deputy Speaker (Lords)

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.