Motion B1 (as an amendment to Motion B)

United Kingdom Internal Market Bill - Commons Reasons and Amendments – in the House of Lords at 2:30 pm on 9th December 2020.

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Lord Stevenson of Balmacara:

Moved by Lord Stevenson of Balmacara

Leave out from “12,” to end and insert “15, 16, 17, 18, 30, 31, 32 and 33 to which the Commons have disagreed for their Reasons 8A, 10A and 15A, do propose Amendments 8B to 8D and 8F to 8K in lieu, do propose Amendment 8L in lieu of the words restored to the Bill by the Commons disagreement to Amendment 12 and do insist on its Amendments 13 and 56—

8L: Clause 10, leave out Clause 10 and insert the following new Clause—“Exclusions from market access principles: public interest derogations(1) The United Kingdom market access principles do not apply to, and sections 2(3) and 5(3) do not affect the operation of, any requirements which—(a) pursue a legitimate aim,(b) are a proportionate means of achieving that aim, and(c) are not a disguised restriction on trade.(2) A requirement is considered to pursue a legitimate aim if it makes a contribution to the achievement of—(a) environmental standards and protection,(b) animal welfare,(c) consumer standards, including digital and artificial intelligence privacy rights,(d) employment rights and protections,(e) health and life of humans, animals or plants,(f) protection of public health, or(g) equality entitlements, rights and protections.(3) A requirement is considered disproportionate if the legitimate aim being pursued in the destination part of the United Kingdom is already achieved to the same or higher extent by requirements in the originating part of the United Kingdom.””

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 the Minister for his opening remarks and have listened carefully to his views. I will reverse the order in which he spoke and hope he will not mind and is able to follow.

I start with the question about powers, on which he ended. I thank him and his colleagues for the considerable time over the last few months—and increasingly the last few days—that they have provided to discuss this Bill and the wider context with which it engages. I confirm that we are happy to continue to talk in the remaining time. We agree with the stated aims of the Bill to ensure that our internal market works well for consumers in all parts of the United Kingdom for workers and businesses trading here and for importers. But we also support the DPRRC in its criticisms of the delegated powers which were initially included in the Bill. The DPRRC argued that they were not appropriate and were in excess of what was needed to ensure the continued operation of the UK internal market, so we are delighted that the Government said in their letter issued this morning that they have:

“listened closely to and acknowledged the strength of Peers’ concerns regarding the position of the devolved administrations in relation to the application of … delegated powers”.

Your Lordships owe a considerable debt of gratitude of my noble friends Lady Andrews and Lady Hayter for their work on this over the last few weeks. They have been tireless in their pursuit of the issue and it has resulted, as the Minister said, in three major concessions, which we welcome, and some other changes. The concessions require the Secretary of State to seek the consent of the devolved Administrations before exercising the powers, setting a time limit for that and a process if consent is withheld, and introducing a statutory requirement to consult with the devolved Administrations before issuing, revising or withdrawing guidance. We welcome these, and the statutory requirement for a review of these powers in Part 1 and Part 2 of the Bill within five years. Finally, on this issue, it is good to see the change in tone towards the devolved Administrations, which is reflected in these changes, in the speech today, and in the letter to which I have already referred.

I turn to Amendment B1 in my name, and the amendment in lieu, and look forward to the debate. I give notice as requested that I intend to test the opinion of the House at the end of that debate. We agree with the Government that, at the core of any approach to setting the rules for the UK internal market, there should be harmonised rules underpinned by a strong consultative process. We seek a combination of common frameworks on the one hand and market access principles on the other.

In the debate that has just occurred on the amendment in lieu offered by the noble and learned Lord, Lord Hope, the House has confirmed its position on the common frameworks process, which, as my noble friend Lady Hayter said and the Minister agreed, builds on substantial progress made to date. The Government’s main objection continues to be that as the common frameworks are, at heart, a voluntary and co-operative system, with all the strengths and benefits that brings to the devolution settlement, it could bring unnecessary uncertainty into the system. We acknowledge that, but we think that there are ways in which that could be tackled, some of which are based on powers that the Government already have in place. We remain willing to explore a possible solution to the Government’s concerns over the next few days—perhaps over dinner, if that is how things are done these days.

However, there is also a need for statutory underpinning of the internal market. The purpose of our amendment is to preserve the potential for managed policy divergence that is central to the devolution settlement. As the noble Lord, Lord Anderson of Ipswich, said on the first day of Report:

“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.”—[Official Report, 18/11/20; col. 1508.]

My amendment provides the derogations to the market access principles. They are commonly available in devolved, federal and confederal states all over the world. Their purpose is more a safety valve than a threat to market integrity, and their use would remain subject to strict statutory controls. As currently drafted, the structure is unbalanced. The common frameworks incentivise co-operation and consensus, and my amendment would diminish in a strictly controlled fashion the crudely centralising force of the market access principles, provide balance and encourage innovation.

The noble Lord, Lord Young of Cookham, said about public health in the same debate:

“Currently, the internal market within the UK has the flexibility, through exclusions, to allow different parts of the UK to move at different speeds …. 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.”—[Official Report, 18/11/20; col. 1510.]

I agree. The Government have failed to explain properly why their list of exceptions is so much more restrictive than that of the EU—well, we can probably work that one out—or, indeed, the World Trade Organization, which is their current go-to standard. While the justifications are unclear, the risks are anything but. Unless the Bill is amended, some of the ability to innovate, which is so valuable, would be lost. This would be a step back for the UK, not a maintaining of the status quo. I beg to move.

Photo of Lord Faulkner of Worcester Lord Faulkner of Worcester Deputy Chairman of Committees, Deputy Speaker (Lords) 2:45 pm, 9th December 2020

Does any noble Lord in the Chamber wish to speak on this amendment? If not, I call the noble Lord, Lord Fox.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

My Lords, like the noble Lord, Lord Stevenson, I will take the amendments in the opposite order to the Minister, if the House is happy with that.

The delegated powers issue has almost become a ritual in your Lordships’ House. A Bill is published and in it are many very draconian powers, which seek to change almost everything the Bill can do at the will of the Minister. There is then a report from the DPRRC which condemns it, and then there is a debate and we start to move towards a more reasonable situation. I hope, perhaps, that we can learn from this and maybe cut out a few of the steps, so that we can get to the reasonable situation. The Government have given considerable ground on this, and for that we should all be accepting and reasonable and, I suppose, grateful, although perhaps gratitude is the wrong word.

With respect to Clause 12, I think we will all be watching quite closely to see how those powers are exercised, because advice can come in many forms and we will be seeking to observe that.

The characterisation that these delegated powers are required in order for the Government to react and act with speed has been absolutely confounded by the way in which the Covid crisis has been addressed by the Government. There has been very rapid legislation and very rapid reaction. Looking forward, we have got to a better place than we were in when we started. I still do not think that we would call it perfect, but we have taken a long time to get there.

My reading of the amendment proposed by the noble Lord, Lord Stevenson, is that it is the return of Amendment 21, or at least most of it. Listening to his very reasonable presentation of the amendment and having listened to the debates on Report, I am somewhat surprised that the Government continue to dig their heels in. I can understand that the list in subsection (2) of the proposed new clause might have raised some concerns, and it can of course be subject to negotiation, but as the list now stands—with environmental standards and protection; animal welfare; consumer standards, including digital; employment rights and protections; the health and life of humans, animals or plants; the protection of public health; or equality entitlements—it seems that the Government could not possibly object to it, so I am surprised. The Minister has set out his concerns about an ordered market, but it is very clear that any market that did not observe these things would not be one that we wanted anyway.

With that response, I suggest that we will be supporting the noble Lord, Lord Stevenson, when this Motion is put to a vote. We hope that the Government will be able to have discussions with the noble Lord and others, so that next time they can come back with something much closer to what we have seen today.

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

I thank both noble Lords for a good, albeit brief, debate. To summarise, earlier I expressed my concerns about Amendment 8L and the expansive list of exclusions from the market access principles that it introduces. The list that we have included has been carefully drafted to strike what is, in our view, a measured balance. It protects the ability of the devolved Administrations and the UK Government to deliver policy, while avoiding harmful or costly barriers to trade within the UK internal market. The Bill does nothing to stop all nations working together to achieve mutual goals and build on our shared high standards.

On the delegated powers in the Bill, it is not proportionate to remove the Government’s ability to ensure that the list of exclusions and legitimate aims remains appropriate. The Government have already set out a comprehensive package of changes to the delegated powers in the Bill, including for the removal of certain powers and for reviews and reporting to Parliament, and new amendments on the role of the devolved Administrations. This provides for effective transparency and scrutiny of the remaining powers.

We believe that there is a reasonable middle ground here. Many noble Lords tabled and supported amendments to alter, but not remove, the powers in the Bill. We agree with those colleagues. These powers are necessary, and we believe that the changes we have proposed should address their concerns. I therefore hope that noble Lords will be able to support the Government’s approach to reinstating these powers in the Bill.

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 both speakers in this short debate. We have not had much buy-in from others, but that just shows that the issues are very clear, and I think that people may well have already made up their minds.

I was interested that the noble Lord did not really come back on the points that I made. His concern seems to be that the list is too expansive, although he does not seem to attack the principle on which it is based. I signal again, and reaffirm, that we would be very happy to discuss how such a list should be configured better to suit his interests and meet his concerns. I hope that I am not misreading the willingness to do that over the next few days—we would certainly be available to talk if he wanted to do so.

I think that we have covered the ground very carefully. We support and welcome the Government’s amendments in the area of delegated powers, but I would like to test the opinion of the House on my Motion B1.

Ayes 295, Noes 250.

Division number 2 United Kingdom Internal Market Bill - Commons Reasons and Amendments — Motion B1 (as an amendment to Motion B)

Aye: 295 Members of the House of Lords

No: 250 Members of the House of Lords

Ayes: A-Z by last name

Nos: A-Z by last name

Division conducted remotely on Motion B1 (as an amendment to Motion B)

Motion B1 (as an amendment to Motion B) agreed.