Amendment 10

United Kingdom Internal Market Bill - Report (1st Day) – in the House of Lords at 6:30 pm on 18th November 2020.

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Lord Stevenson of Balmacara:

Moved by Lord Stevenson of Balmacara

10: Clause 8, page 6, line 47, at end insert—“(c) the protection of consumers;(d) the protection of environmental standards;(e) the promotion of social and labour standards;(f) the protection of public health;(g) the protection of animal health.”

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)

My Lords, In moving Amendment 10, I also speak to Amendments 21, 41, 48 and 49, which together deal with various exemptions and derogations that we believe should be appropriate in the case of the market access principles. I thank the noble Lords, Lord Anderson, Lord Young and Lord Wigley, and the noble Baronesses, Lady Bowles and Lady Jones, for their support, and I look forward to their contributions.

Now that we have accepted by a majority Amendment 1 from the noble and learned Lord, Lord Hope, and the Government have said they will not oppose Amendments 38 and 51, I hope we can assume that the common frameworks process will be at the centre of our future concerns about the internal market. We think it will ensure that the devolved nations will be able, within the limits of UK law, to formulate and apply policies that best suit their local circumstances, working together in order to enable the functioning of the UK internal market. Each devolved Administration will retain the ability to diverge from the harmonised rules in their territory within the mandate given to them by the devolution settlement, but only after consulting the relevant policy group to see if a common outcome can be reached and agreed to.

We fully accept that there have to be backstop powers retained by the UK Parliament that are subject only to the normal “consult and seek consent” modality, and we accept that that brings into play the market access principles system set out in the Bill. However, that does not operate by agreement. It is hard-edged; it is a set of strict statutory rules that do not permit any real divergence. For example, my noble friend Lord Foulkes mentioned in the last group that Clause 8, on the non-discrimination principle, refers to “legitimate aims” and limits them to

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

“the protection of public safety or security.”

So it is very tight—but does it have to be that way? Surely we want exclusions to permit various exceptions from the lists, as set out in our Amendments 10 and 41. Others will make the case for the extension of the legitimate aims in Amendments 21 and the rest, affecting services.

The Welsh Government put around a note, which they prepared in response to the papers put around last night by the Government. They argue that the Bill’s limitations have been too tightly drawn and that they go much beyond current international regulations, and effectively put new restrictions on devolved competence. One of the policy statements issued yesterday by the Government said:

“Each part of the UK will be obliged to follow a rigorous process to justify an exclusion. This will include suitable evidence and a risk assessment shared between UK administrations, to confirm the nature of the threat posed and the effectiveness and proportionality of any proposed measure in response.”

This is hard-edged. This is not the language of consult and seek consent, let alone of a Government trusting in the common framework process.

Our amendments seek to add significant exclusions to the market access principles for goods and services and in relation to the recognition of professional qualifications. We think they are justified, we think they are proportionate and, otherwise, will not have an adverse impact on the powers we think the UK Government must retain. I beg to move.

Photo of Lord Anderson of Ipswich Lord Anderson of Ipswich Crossbench

My Lords, it is a pleasure to follow the noble Lord, Lord Stevenson, and to have put my name to five of the six amendments in this group. The purpose of these amendments is to preserve the potential for legitimate policy divergence that is inherent in the devolution settlement. That potential is squeezed out for the future, save in limited and inconsistent respects, by the non-discrimination and mutual recognition principles as they appear in the Bill.

The scheme of these amendments is to provide for derogations from the applicable market access principles, to be available on a consistent basis across Parts 1, 2 and 3 of the Bill. Such derogations would be safety valves against the pressures that build up when central and local interests clash—safety valves of the sort that the member states of the European Union were sensible enough to gives themselves in their treaties, and that exist in devolved, federal and confederal states all over the world. Their purpose is more than merely political. The exercise of devolved powers has, in the past, produced creative and positive results in fields ranging from the requirement of fire suppression systems to the sale of electric shock collars. Noble Lords drew attention in Committee to the potential for similar action in future, if not prevented by the Bill, from measures against obesity to bans on the sale of peat.

The amendments are not a recipe for pointless and obstructive barriers to trade, which I strongly agree are to be avoided, because the use of those exceptional powers would remain subject to strict statutory controls. If challenged, rationality and the absence of protectionist purpose would have to be demonstrated, much as when the Scottish Government were put through its paces on minimum alcohol pricing. Yes, there will be cases in which compliance has to be demonstrated in the courts. Who, if not the courts, can be the arbiter of whether public authorities, whether central or devolved, have exceeded the limits of their legal authority? Litigation is always an inconvenience, and I would not wish it on my best friend, but the universal fact that the scope of a legal power must, in the last resort, be determined by the courts is no sort of justification, I would suggest, for withholding or removing that power from the devolved Administrations.

As for cases that last 10 years, as a barrister I can only dream enviously of such a durable source of income. Urgent cases can be quickly resolved, and the major source of delay will be removed once we move outside the jurisdiction of the Court of Justice of the European Union. Without its intervention, the time occupied by the Scottish case on minimum alcohol pricing —which delayed the introduction of that measure—would have been very much shorter.

The common frameworks incentivise consensus. Among their many advantages, therefore, is a likely reduction in recourse to litigation. So I welcome Amendment 1, which, if it remains in the Bill, will prioritise the common frameworks, and significantly narrow the circumstances in which the market access principles apply. For as long those principles remain in the Bill, it seems to me that something in the nature of these amendments is needed, if only and the noble Lord, Lord Stevenson, as a backstop. These amendments would diminish, in a controlled fashion, the crudely centralising force of the market access principles. They would also help to preserve the mutual respect between nations that the perpetuation of our union requires.

Photo of Lord Young of Cookham Lord Young of Cookham Conservative 6:45 pm, 18th November 2020

My Lords, it is a pleasure to follow the compelling speech of the noble Lord, Lord Anderson. I have added my name to Amendment 10 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Anderson of Ipswich, and the noble Baroness, Lady Bowles of Berkhamsted.

As I said in Committee, it is essential that all the nations within the UK can pursue effective policies on public health, which is my particular interest. Last Friday, the Public Services Select Committee, of which I am a member, published its first report on the lessons from coronavirus for public services. One of the key recommendations to the Government was that there is an urgent need to recognise the vital role of public health in reducing deep and ongoing inequalities exacerbated by Covid-19. Unamended, the Bill makes that task more difficult.

While the committee welcomed the Government’s commitment to extend healthy life expectancy by five years by 2035, and to narrow the gap between the richest and the poorest, we also recognised that this would be tough to deliver. We called on the Government to wait no longer before publishing their strategy to achieve this manifesto commitment and their response to the Green Paper Advancing Our Health: Prevention in the 2020s, which was due in January this year.

Why is this relevant to these amendments? Currently, the internal market within the UK has the flexibility, through exclusions, to allow different parts of the UK to move at different speeds on public health. England was able to lead the way on restricting tobacco displays in shops; Scotland and Wales are currently ahead on policies such as minimum unit pricing for alcohol. However, the internal market Bill may limit future innovations, as the exclusions are both narrow and narrowly applied to only part of the market access principles.

While policies similar to those I just mentioned might be allowable, it is not difficult to identify future public health policies that would not. For example, in the Explanatory Notes to the Bill, the Government describe how these rules would allow a packet of crisps produced in or imported into any part of the UK to be sold in any other. However, this leaves little space for Governments within the UK to pursue future legislation that aims, for example, to restrict the salt content or size, or even to improve the labelling, of crisp packets. The justification for this is unclear, as articulated in a blog by the Institute for Government.

My view is that leaving the EU should not remove the ability we currently have for different parts of the country to move at different paces. This has meant that we have not had to move at the pace of the slowest, and the different parts of the UK can benefit from the experience of the market leader. The noble Lord, Lord Anderson, made this point well. The Government have failed to explain why their list of exceptions is so much more restrictive than that of the EU or, indeed, the WTO. While the justifications are unclear, the risks are anything but. Unless the Bill is amended, some of this ability to innovate would be lost. This would be a step back for the UK, not a maintaining of the status quo.

The background over the last few years has been to give Holyrood and Cardiff more autonomy, not less. The Bill conflicts with that trend, helping to increase demands for independence and undermining the devolution settlement. It would not limit the ability of just the devolved nations to act, but that of England too. As part of its obesity strategy, the Department of Health and Social Care will consult on requiring calories to be included on alcohol product labels. The mutual recognition principle could hamper this legislation if alcohol produced in the rest of the UK was not required to display calories. Further, if overseas companies wished to avoid displaying calories, they could simply ensure that their imports arrived in another part of the UK before moving them to England for sale. When other noble Lords and I raised our concerns about this in Committee, my noble friend Lord Callanan, responding for the Government, was unyielding. Indeed, he said that the exclusions from market access principles were

“intentionally narrowly drafted, to ensure that there are no unnecessary trade barriers that would ultimately increase costs to businesses and consumers while reducing choice.”—[Official Report, 28/10/20; col. 339.]

The Government have demonstrated that they are willing to listen to the concerns of the House—for example, with the removal of the Secretary of State’s powers to change the scope of the mutual recognition principle—yet in other parts of the Bill they have suggested a relatively small adjustment, with the need to “consult with” but not “gain consent from” the devolved nations before using these powers. There has still been no movement on the limited nature of the public interest exceptions in the Bill, nor am I aware of any discussions on that, as I called for in Committee. That is why the amendments have been brought forward again on Report.

These amendments are supported by a wide range of health organisations: the British Heart Foundation, the British Lung Foundation, Asthma UK, Cancer Research UK, the Faculty of Public Health, the Mental Health Foundation, the Royal Society for Public Health, Action on Smoking and Health, and the Alcohol Health Alliance, for whose briefing I am most grateful.

I very much hope that, even at this late stage, the Bill might be amended and the Government might reflect the concerns that have been so widely shared on this subject.

Photo of Baroness Bowles of Berkhamsted Baroness Bowles of Berkhamsted Liberal Democrat

My Lords, I support the general thrust of all the amendments in this group, and I have added my name to Amendments 10 and 21, which relate to goods. I should also have put my name to the services amendments, because both I and my group support those as well.

As was debated in Committee, we already worked under a more generalised public policy, legitimate aim regime while in the EU, and, as the noble Lord, Lord Anderson, said, that provided safety valves, which have now been taken away. In Committee, the Minister argued that the UK internal market was different, and for some reason that meant that it needed to be narrower. I cannot understand why—perhaps because we are closer together—we have to have fewer freedoms because we have left the EU. Therefore, I agree entirely with the drafters of the amendments that there are many more legitimate aims that need to be spelled out.

Realistically, differences will not be introduced into the market without a lot of thought. As my noble friend Lady Humphreys said in Committee, Wales is a good size to experiment with. The noble Lord, Lord Young, gave examples of various nations progressing at different speeds. Differences will survive only when they are practical and when matters of good public policy all deal with specific problems within a particular area, but they should be allowed to be put to a proper test and should not be undermined from the start by immediate get-arounds.

These are important amendments, and I hope that the Government will consider carefully why it is necessary for the Bill to undermine the freedoms currently enjoyed. That is not how Brexit was advertised, whether you were for or against it.

Photo of Lord Whitty Lord Whitty Labour

My Lords, I have added my name to Amendment 11, in the name of the noble Baroness, Lady Boycott. She has her name down to speak later but has indicated to me that, because of other appointments, she might not be able to make it. She has therefore asked me to say a few words—more than I might otherwise have done.

I recognise that the amendment in the name of my noble friend Lord Stevenson lists a number of public interest exceptions that should be put into the Bill. There are good arguments for many or all of them, but surely, in this crisis period for our climate and our natural environment, the protection of the environment must be seen as an exception. It is one where, for example, the Welsh Government could take a lead, with different regulations on, for example, air quality limits, pollution in rivers, noise and dangerous chemicals that are tighter than those adopted by the UK, or English, Government.

The noble Lords, Lord Anderson and Lord Young, have both set out examples of where the devolved Administrations have indeed taken that lead. If the Government oppose long lists, they ought at least to accept a short list of environmental protections, because they are speaking with forked tongues on this. We have had that today with the 10-point plan for a long-term strategic approach to a green economy. We have had the green industrial recovery plan and commitments made for houses to be fuelled entirely by offshore wind. We have also had big commitments to green spaces and other environmental objectives. And, of course, the Government are trying to impress the world—rightly now—on our commitment when we take over to lead the COP 26 in Glasgow next year.

However, we also know that, historically, free trade is regarded as being breached when environmental protection regulations have been opposed by the WTO and in free trade agreements around the world. There is a global change in attitude towards this, and indeed to some of the WTO rules, but it would be absolutely absurd if, to preserve an internal market within the United Kingdom, we prevented progress on environmental protection by the devolved Administrations or by England alone in the name of having complete and absolute internal market access rather than mutual recognition of different requirements.

If a regulation, a tax process or a planning approach that preserves environmental protection aims is to be regarded as a barrier to trade in our internal market, we are going against the trend of the whole of the rest of government policy and actually going against what is a rather slow but nevertheless clear intent of how world trade will have to be conducted in the age of the Paris climate agreement and the need to reduce carbon and greenhouse gas emissions. If there is one public interest limitation, surely it ought to be environmental protection, and that is what would be provided by the amendment in the name of the noble Baroness, Lady Boycott, which is also signed by myself and the noble Lord, Lord Randall.

Photo of Lord Randall of Uxbridge Lord Randall of Uxbridge Conservative

My Lords, it is a pleasure to follow the noble Lord, Lord Whitty. I too want to speak in support of Amendment 11, in the name of the noble Baroness, Lady Boycott, which I was pleased to add my name to. We have just heard from the noble Lord, Lord Whitty, who also signed the amendment and has astutely and eloquently put the case for it.

I apologise that I was not able to join your Lordships’ deliberations in Committee, but, from reading Hansard, I see that my noble friend the Minister stated:

“The current list of legitimate aims will … align in many cases with the protection of the environment … expanding the list … beyond the current list would increase the grounds on which goods from one part of the UK could face discrimination in another … but with each addition steadily eroding the benefits that we all enjoy of the UK internal market. Expanding the list would also make discrimination easier to create and implement within the internal market.”—[Official Report, 28/10/20; col. 338.]

With respect, I disagree with that. Amendment 11 adds the protection of environmental standards to the shortlist of what constitutes a legitimate aim. It is imperative that, at a time when most acknowledge that we are in a climate and nature crisis, the protection of environmental standards should be considered a legitimate aim—indeed, as the noble Lord, Lord Whitty, said, it is probably the most important legitimate aim—and that we can do so without it being treated as indirect discrimination.

As we have also heard today, the Government have unveiled a series of measures that are ground-breaking and very ambitious, and I do not doubt that the Government take environmental standards very seriously. I hope that this amendment will give them an opportunity to give more power to their elbow. This, I believe, is a very achievable ask and I hope that my noble friend the Minister will agree that it will help to ensure that the internal market supports the achievement of environment and climate goals and targets at this crucial time.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords)

I call the next speaker, the noble Baroness, Lady Boycott, although I am not completely convinced that she is with us. No, she is not, so I will move on to the next speaker, the noble Lord, Lord Wigley.

Photo of Lord Wigley Lord Wigley Plaid Cymru 7:00 pm, 18th November 2020

My Lords, I am delighted to follow the noble Lord, Lord Randall, and agree with much of what he said.

I support the amendments in this group, including the lead amendment, and will address in particular Amendment 21, which also stands in the name of the noble Lord, Lord Stevenson, to which I have added my name. I very much agree with his comments and will not repeat his references to the pleas made to us by the Welsh Government. We need to build flexibility into the Bill to deal with the issues that have been addressed.

In addition to the exclusions identified in Amendment 10, I refer to the two groups identified in Amendment 21, namely, in proposed subsection (2), paragraphs (f) and (g), which deal with cultural issues and regional socio-cultural considerations. Although there are many aspects to consider, the category that I wish to highlight is the Welsh language. It is used widely in day-to-day life in Wales, a factor recognised by many commercial concerns that use it to promote their goods or services, and for advertising. Contracts offered by either the national Government in Wales or local government may well include requirements relating to the use of the Welsh language in the delivery of services or the definition of goods.

The use of Welsh in Wales is underpinned by legislation. It is not just a question of equal validity, a principle incorporated in the Welsh Language Act 1967, replaced in the Welsh Language Act 1993 in favour of stronger provision, and further strengthened by legislation in our National Assembly a decade ago. Among other considerations is the need to provide information in Welsh, in order to give Welsh speakers the right to receive information and, where appropriate, respond, in the language of their choice. Such requirements can arise in the context of service delivery, particularly personal services, community participation and cultural activities. I therefore ask the Minister to give me an assurance that the Bill in no way overrules or diminishes Welsh language rights, and that related dimensions can be recognised under this legislation as a valid reason for a derogation.

Before I conclude, perhaps I may respond to comments made earlier by my good friend the noble Lord, Lord Cormack. I, too, would have much preferred to be with noble Lords in the Chamber. If I had, I would have pointed out to the noble Lord that the noble Baroness, Lady Bennett, is most certainly not the only Member of the House who regards the union as unacceptable in its present form. As he well knows, while I accept that all good sense tells us that there must be a close working relationship between the nations of these islands, which would probably include a customs union and possibly some form of Britannic confederation, the present relationships do not work in many ways. Those can best be encapsulated by the phrase, “Power devolved is power retained”—a feature that has raised its head on many occasions in our deliberations on the Bill. As has been acknowledged for Northern Ireland, both Wales and Scotland should have a fundamental right to determine their own future, whether in the present union, a confederal union or, indeed, the European Union. In the meantime, we should also do our best to get on with each other, co-operate on those matters in which we have common interests and avoid the excesses demonstrated by the Prime Minister in his remarks about Scotland last week.

Photo of Baroness Jones of Moulsecoomb Baroness Jones of Moulsecoomb Green

My Lords, I will be brief. The amendments in the group are basically about protecting the environment, consumers and public health—all legitimate aims. The noble Lord, Lord Randall, made a good point when he said that, given the Government’s U-turn or swerve towards green issues, these amendments can be helpful. I see no problem with the Government picking them up and saying thank you. One problem with the Bill as it stands is that they are trying to create a legal system more restrictive and overbearing than the EU single market ever was. The amendments reintroduce existing exceptions in EU law that allow the Government to pursue a sensible policy that will benefit people and the planet.

One of the delights of my experience here in your Lordships’ House at the moment and over the past 18 months has been that I am not the only person banging on about the environment any more. I would like to thank everybody who has written these amendments; I support them thoroughly and I hope that the Government see them as helpful towards their green aims.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Conservative

My Lords, I must say that I am uneasy about this group of amendments because I am not sure that they achieve what many noble Lords want. This Bill is designed to provide a UK single market—like the EU’s and, indeed, that of the USA—to ensure a properly functioning market that creates prosperity and economic security for our four great nations coming together in the United Kingdom under Her Majesty the Queen.

We want trade to flourish, and we want to support business interchange and the free flow of information. This helps the devolved nations, as 60% of exports from Scotland and Wales and nearly 50% from Northern Ireland go elsewhere in the UK and they all benefit greatly from a transfer of resources, mainly from London. We want trade to increase as we see more import substitution following exit from the European Union.

Public policy can be decided within that internal market framework with some variations; we have talked about that before. I support local variations, such as minimum alcohol pricing in Scotland and plastic bag regulation in Wales, which I encouraged. However, they must be limited or the single market will be undermined. Adding consumers, the environment, labour standards, public and animal health, cultural expression, regional characteristics and equality in various ways, as these amendments do—even with an opt-out where the relevant aim is already achieved, as in the amendment in the name of the noble Lord, Lord Stevenson—changes the whole character of the legislation on non-discrimination and market access. I note the contribution of my noble friend Lord Young of Cookham but I do not see how different rules on smoking, minimum pricing or the use of the Welsh language, which I very much support, would be ruled out by this Bill.

As for differential labelling, whether on crisp packets or anything else, I know from experience that having different labels adds costs and introduces logistics issues, which puts prices up for consumers. It would be much better to introduce labelling for health reasons and significant climate change reform for the United Kingdom in the way it used to be agreed in Brussels. I fear that these undoubtedly well-meaning amendments would provide a plethora of excuses to impose protectionist and other barriers between our four nations.

A source of dispute, not collaboration and harmony, across our land and a field day for the legal profession would not help us to achieve the leaps forward that we all want on the environment, standards or anything else that has been the subject of this debate.

Photo of Lord Teverson Lord Teverson Chair, EU Environment Sub-Committee, Chair, EU Environment Sub-Committee

My Lords, I will speak to Amendment 11 in the name of the noble Baroness, Lady Boycott, although I am very much in favour of the amendments in the name of the noble Lord, Lord Stevenson, as well.

Devolution has not been a disaster in Scotland, Wales, Northern Ireland or, indeed, London. It has strengthened the United Kingdom, our economy and our society. My great fear is that the overwhelming application of the market access principle—with those few exceptions: life or health of humans, animals and pets or public safety and security—is far too restrictive and will mean that important parts of devolution erode and disappear over time.

As with Amendment 11 in the name of the noble Baroness, Lady Boycott, I am particularly concerned about the environment, including climate change. I will be brief on this. We heard arguments in Committee that the most important thing was maintaining strong competition in the United Kingdom. I agree with that, but, like all things in market economies, that needs to be constrained in certain ways. While we need market competition to remain strong, it is equally important in a modern economy that innovation can take place. Competition in environmental regulation and some of these other areas is equally important to stimulate innovations in the nations of the United Kingdom that others can follow when they are successful. I see that as a key part of this process: being able to keep at the same time the different ways in which the nations of the United Kingdom can interpret environmental and climate change needs.

I am delighted that the Minister responding is the noble Lord, Lord Callanan, who is the Government’s Minister for Climate Change. I am sure he will be absolutely persuaded by these arguments that we need these environmental innovations to help with climate change as we move forward—as the Prime Minister wants us to, as he showed in his 10-point plan today—and to make sure we keep that progress and do it in the many ways the nations of the United Kingdom wish.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

My Lords, I am most grateful for this opportunity to follow the noble Lord, Lord Teverson, who chairs our EU Environment Sub-Committee so expertly and courteously.

I take this opportunity in supporting Amendments 10 and 11—I would marginally prefer Amendment 10, but presumably they are for debating purposes—briefly to ask my noble friend Lord Callanan whether our understanding of the Bill as currently drafted is correct, in that it appears to be very tightly and prescriptively drawn, as so expertly indicated by the noble Lords, Lord Stevenson and Lord Anderson. Would protection of the environment or the labelling provisions proposed by my noble friend Lord Young of Cookham be permitted? Is my noble friend Lady Neville-Rolfe correct that, for example, the labelling provisions set out by my noble friend Lord Young would already be allowed?

My understanding is that member states such as Denmark can already provide additional information for consumers, such as the calorie content of beers and other foods, and that we have not gone that far yet. Would that be permitted under the Bill as currently drafted, or do we need the amendments in this group to be moved? That would greatly assist me understand how exactly the provisions in the Bill as drafted are to be interpreted.

Photo of Baroness Noakes Baroness Noakes Conservative

My Lords, I am sure that the supporters of these amendments are motivated only by the desire to enable the devolved Administrations to do the right thing in environmental protection and all the other fine things mentioned in these amendments, though I must say to the noble Lord, Lord Stevenson, that I have absolutely no idea what “cultural expression”, as mentioned in Amendment 21, has to do with the internal market.

I appeal to noble Lords to remember that the aim of this Bill is to ensure that the UK’s internal market operates on a frictionless basis and allows businesses to trade in the UK with the minimum of barriers as they do now. This helps businesses in all parts of the UK operate successfully and profitably, which supports the aim I hope we all share of a healthily growing economy. More importantly, it delivers for consumers because trade barriers tend to increase costs and reduce consumer choice.

I have to say that this is not a question of whether a particular regulatory rule will itself increase costs. We can argue all day about whether, say, increasing environmental regulation will increase or reduce costs for consumers. That is not the point; the point is about having different environmental regulations in one part of the United Kingdom compared with other parts and whether that will work in the interests of consumers or against them. The answer to that is clear. If such regulations have the effect of erecting further trade barriers, the consumer takes the hit.

The absence of trade barriers is also crucially important when the UK comes to negotiate new trade treaties. Our negotiating strength would be seriously undermined if the Government were not able to be clear about how the UK’s own market works internally and how access would work for trade counterparties. International trade is most definitely not a devolved competence, and nor should it be if we want to stand on the world trade stage as a major player. I hope that all noble Lords would align themselves with that aim now that we have left the EU. Schedule 1 contains some significant exclusions from the market access principles. I urge noble Lords not to make exclusions from the internal market so great that, as these amendments have the capacity to do, they kill the infant internal market in its cradle.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords) 7:15 pm, 18th November 2020

My Lords, the noble Lord, Lord Cormack, has withdrawn from this debate, so I call the noble Baroness, Lady Clark of Kilwinning.

Photo of Baroness Clark of Kilwinning Baroness Clark of Kilwinning Labour

I speak in favour of the amendments, particularly Amendment 10, and the principle that any changes to the devolution settlement should not be made without the consent of the devolved institutions themselves and that the UK exiting the EU should not be the basis on which it is determined whether a matter is reserved. I argue that this is not the time or the circumstances in which we should be considering taking powers away from devolved institutions and overriding their wishes.

The devolved institutions were not created equal to Westminster in the devolution settlement. It has been suggested on a number of occasions today that there should be that equality, and many Peers have spoken about the need for that relationship of equals. I believe that that is the direction in which we need to be going and today’s debate again highlights that that is definitely the kind of constitutional arrangement that people in Scotland are asking for, irrespective of where they stand on the independence issue.

The examples given in today’s debate in relation to Wales being able to legislate on the use of single-use plastic are good at showing why this legislation is unhelpful. It has been confirmed by the Government in documents that Wales’s plans to bring forward proposals to ban all nine types of single-use plastics referred to in the EU directive would not be possible if this Bill were to become law.

This Bill would affect the ability of the devolved institutions to regulate any goods because they would require goods manufactured in that particular country to comply in certain ways that would only be relevant for goods made in that country. Goods made in Scotland could be regulated by the Scottish Government and required to comply with regulations, but goods brought in from other countries in the UK would not be required to do so.

I listened with great interest to the noble Baroness, Lady Noakes, and I fully understand the principles that she was outlining, but that horse has bolted and that is not where we are in the 21st century in the United Kingdom. We have to recognise the very different political cultures that exist within the different nations that make up the UK, and it is in that context that we have to look at this legislation.

Will the Minister consider the specific example about public procurement regulations raised by UNISON? Would the rules on public procurement, which have been devolved to Scotland since 1998, be protected if this legislation were enacted? For social, employment and other reasons, procurement legislation introduced in the Scottish Parliament under Labour and the Liberal Democrats, as well as under the Scottish National Party, is different from that south of the border. There is a different culture in Scotland. Can the Minister outline whether those regulations would be impacted by this legislation? This is just one example of the many areas of legislation where a huge amount of work has taken place since devolution and which could be affected by the Bill. I understand that the Minister is here to represent the Government, although he will have his own views.

These proposals are cavalier and irresponsible. I ask the Government to look at these amendments and think again. This is not just about trade. It is about the way in which we in the four nations of this country relate to each other. If we do not have the support of the devolved institutions for this approach, I respectfully suggest that this is the wrong way forward.

Photo of Baroness Northover Baroness Northover Liberal Democrat Lords Spokesperson (Foreign and Commonwealth Affairs)

My Lords, I support Amendment 10 and other amendments in this group. Powerful arguments have been made this afternoon about devolution. Common frameworks must continue to allow divergences within the devolved Administrations and between them and England. The Bill must not undermine this. The amendment relating to that, in the name of the noble and learned Lord, Lord Hope, was passed overwhelmingly.

At Second Reading the noble and learned Lord, Lord Judge, introduced his regret amendment by expressing shock at the Government’s plans to break international law. At the end of the debate he concluded that, stunned as he had been by these proposals, he had perhaps overlooked the extent to which the Bill also undermined devolution.

In this group we flag up some of the areas in which the devolved Administrations currently have flexibility. The Bill could prevent this, as my noble friend Lady Bowles and others have pointed out. As the noble Lord, Lord Anderson, said, these differences exist in the EU, even with its powerful single market. I am not sure how deliberate the removal of the existing flexibilities has been, or whether this simply reflects that devolution is not in this Government’s DNA.

I agree with what has been said about the environment. I want, briefly, to flag up public health, as did the noble Lord, Lord Young of Cookham. In the middle of a pandemic, this Bill potentially undermines our ability to move forward in this area. We see variations in public health which may well have played a part in encouraging the devolved Administrations to take more ambitious actions. The rates of alcohol-related deaths are more than 60% higher in the most deprived areas than in the least deprived. The highest rates of smoking are consistently found among the most disadvantaged. Scotland has the highest rate of alcohol-related deaths in the United Kingdom. Its Government have introduced a range of policies to address this. The Welsh Government have said that they will do more to extend non-smoking areas. This is also welcome.

These amendments seek to ensure that, when one devolved Administration move ahead of another, they can do so. We hope that they may be able to pull the others along with them. Undermining devolution is clearly one of the fundamental problems with this Bill.

Photo of Lord Naseby Lord Naseby Conservative

My Lords, I respect the views of the noble Baroness who has just spoken, but I have to say that there is little in what she said that I agree with. Amendments 21, 48 and 49 are quite different from Amendments 10 and 11. They go, in my judgment, way beyond what is necessary for a successful free trade market. Really they amount to micromanaging, and on the whole Her Majesty’s Government in any form, whether it be devolved or central, certainly are not terribly good at managing commercial activities. So I suggest that those amendments are unacceptable.

Amendment 11 is one that I warm to because the environment is absolutely crucial. In that context we include climate change, which we know is affecting every nation in the world, so that is a very serious area. Whether this amendment is the right one or not is almost for the Government to decide. I care deeply about the environment. I am privileged to live outside London. I shall drive home tonight, 50 miles to Bedfordshire, and it is a very nice environment there. It is essentially a horticultural one, which brings me to the point that horticulture is changing, not least because we are looking to achieve a fair degree of import substitution. All sorts of new challenges arise from that. We virtually gave up in the glasshouse world, losing out to Holland. There is all sorts of experimentation going on—growing vegetables just in water and so on—but this is not the time to go into that.

I do worry that there are products at the margin, where there is always somebody lobbying against them. Smoking has been mentioned. I have never smoked, but I accept the current situation in which people have the right to smoke if they wish to, and there are clear frameworks in which they can follow that. Pesticides are important in the horticultural world because they affect yields; again, that is a controversial area. So I will listen to my noble friend, particularly on Amendment 11, about which I have a reasonably open mind. I know that the environment is absolutely crucial, but I do not want to see areas of our society and our market squeezed out because of some heavy lobbying from one particular group who do not like the particular industry involved.

Photo of Lord Callanan Lord Callanan Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My Lords, Amendments 10, 11 and 41 would expand the list of legitimate aims used to justify where statutory requirements in one part of the UK can indirectly discriminate against goods or services from another part of the UK. So I will start by saying that the Bill provides an updated, coherent market structure which will help to avoid future complexities and prevent costs being passed on to customers through an increase in prices or a decrease in choices. An expansive list of legitimate aims would increase the potential discrimination faced by businesses or service providers, eroding the benefits of the internal market and creating damaging costs and internal barriers to trade.

The current list in the Bill is targeted to allow nations to meet their respective goals while avoiding unnecessary damage to the internal market—a point that was well made by my noble friend Lady Neville-Rolfe. For example, the Bill already includes the protection of public, plant and animal health, and in some cases, of course, this will align with the protection of the environment. However—I cannot stress this enough—the Government have repeatedly committed to maintaining our world-leading standards across a number of different areas, whether that is in consumer protection, the environment, social and labour standards or public, animal and plant health. The Bill does not undermine the great strides that we have taken in these areas, and we will continue to be at the forefront of improving and protecting our high standards.

Under this Bill, the devolved Administrations will retain the right to legislate in devolved policy areas. Legislative innovation remains a central feature and, indeed, a strength of our union. The Government are committed to ensuring that this power of innovation does not lead to any worry about a possible lowering of standards, by both working with the devolved Administrations via the common frameworks programme and by continuing to uphold our own commitment to the highest possible standards. It is important to remember that the market access principles do not prevent the UK Government or the devolved Administrations adopting divergent rules for goods or services.

Let me deal directly with the point made by the noble Lord, Lord Wigley, about Welsh language provision. The Welsh Government will still be able to require goods made in or imported into Wales to be labelled in Welsh, provided they are non-discriminatory. The provisions in the UKIM Bill will mean that these goods can then be sold throughout the rest of the UK under the market access principles. Those principles will simply protect against the application of new rules if they give rise to harmful barriers to trade.

Amendments 21, 48 and 49 seek to introduce broad new exclusions from these principles for goods and services and the automatic recognition principle for professional qualifications. The framing of the exclusion would allow the market access principles to be set aside if it could be shown that a measure was a proportionate means to achieve a legitimate aim, as set out in the proposed new clauses, but that list of legitimate aims is so long that it would effectively render the protections in Parts 1, 2 and 3 virtually meaningless. It would give little protection to businesses, service providers or professionals who wish to operate across the whole of the UK with a minimal regulatory burden. A regulator or legislator could justify a very wide variety of discriminatory measures using the justifications in the new clauses.

The noble Lord has attempted to remedy this with sub-paragraph (1)(c) of the new clause, which states that the exclusion can be used only if it is

“not a disguised restriction on trade”.

The Government’s view is that the combination of a greatly expanded list, and this new and ambiguous concept of a disguised restriction on trade would create a completely unreliable metric and make the operating conditions of the UK internal market ambiguous for UK businesses and professionals. This amendment could create a massive additional burden on the judicial system, through those seeking legal clarity on this legislative ambiguity, on a case-by-case basis, as to whether a matter is proportionate to a legitimate aim, and whether it is in fact a disguised restriction on trade.

I can confirm for my noble friend Lady McIntosh that, as I have explained on previous occasions, the exclusions and derogations we have drafted from the market access principles across Parts 1, 2 and 3 are narrow and tightly defined in order to protect the functioning of important policy areas. This protects the ability of the devolved Administrations and the UK Government to preserve the proper functioning of important policy areas, while avoiding any harmful or costly barriers to trade within the UK’s internal market. The Government’s view is that the internal market framework is best served by a set of clear principles which are not caveated by the more expansive legitimate aims and exclusions that these amendments introduce. Allowing such wide and undefined exclusions would inevitably lead to new barriers to trade for businesses and professionals across the United Kingdom market.

It should also be noted that our proposed regime does not require a central authority to confirm or rule on public policy matters applying to DAs—unlike the system within the EU, of course. This means that the devolved Administrations are free to set their own regulations in devolved areas for their own producers, as long as these regulations do not result in trade barriers with the rest of the UK.

I can tell the noble Baroness, Lady Clark, that public procurement is not within the scope of the Bill in relation to either goods or services, so she need not listen to UNISON in future on this matter. On her question about banning single-use plastics, we are of course committed to being a global leader in environmental protection and to maintaining our high standards in this area. In fact, the UK’s plastic microbead ban came into effect in January 2018 and was a landmark step, before the EU introduced similar legislation. The Bill will preserve Wales’s ability to regulate in line with its current policy for domestic producers; however, given our shared commitment to high environmental standards, it is only right that goods being sold lawfully elsewhere in the UK are not denied access to the Welsh market.

The Bill aims to ensure frictionless trade, movement and investment between all nations of the UK, and these amendments would, in our view, compromise our ability to achieve that objective. For the reasons I have provided, I therefore cannot support these amendments and I hope the noble Lord will feel able to withdraw his amendment.

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)

My Lords, I thank everyone who has spoken in this debate for their thoughtful and often powerful contributions. It has been a wide-ranging debate and a very interesting one. It has raised new dimensions in our debate today, and for the ones we will have in succeeding days on Report.

It made me think of two things that I want to share with the House in concluding. A lot of the problems with the Bill arise from the accelerated timetable it has gone through. The feeling I am left with after this debate is that if there had been more time for debate prior to its publication, we would not be facing the rather uncomfortable tension between the wish to maximise consumer benefit and reduce barriers to trade, which has been expressed by a number of speakers and which we fully support, and being unable to respond to local wishes in parts of the country on issues that matter to local people. We want there to be competition not only in raising standards but in innovation and finding new ways of dealing with issues of public policy that may arise.

Interestingly, various derogations and exemptions that appear in the amendments in this group mimic the concerns expressed during the Trade Bill, which we will return to later this year, and which were resolved in the Agriculture Bill, with the Government conceding that there needed to be a statement on the standards of environment, animal welfare and animal production standards in relation to the agricultural trade and products. If you add public health, social and labour standards, we are back with the lists that appear in today’s amendments. I wonder why that is; I do not really have an answer. However, it might be worth more consideration. I will look carefully at Hansard to see whether we can find a common thread that might be picked up in later amendments, and on which it might be worth pushing for further debate if we can—or perhaps to a vote.

In passing, I am sorry that the noble Baroness, Lady Noakes, whose contributions are always of interest, was foxed by the term “cultural expression”. I believe that is the term used when state aid is used to support activities that would otherwise not be possible. A reference here would be the horse race betting levy, which would otherwise be banned, or the support that this Government brought in to support the film industry, animation, high-end drama and other aspects of cultural life, building on work done initially by the Labour Government. I think that is where it comes from. If it is valid for anyone in the public sector or an elected organisation to wish to see more work, investment and activity in the green economy, for example, as the Prime Minister announced today, it is just as appropriate to say that there could be support for cultural expressions, the term used to talk about the culture industries.

The general feeling is that the Bill is too tightly constrained around how the market access provisions will work—so much so that there may be disbenefits to consumers unless people in different parts of the country can respond differently to issues they feel strongly about. As I said, I will read Hansard, but I feel that while the common frameworks will be able to carry most of the load of the issues raised today, they will not take us all the way and it may be necessary to return to this issue at some stage. In the interim, I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Amendment 11 not moved.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords)

I should inform the House that if Amendment 12 is agreed then I cannot call Amendment 13. Does the noble Baroness, Lady Andrews, wish to move Amendment 12 formally?