United Kingdom Internal Market Bill

Second Reading

That the Bill be now read a second time.

My Lords, I beg to move that the Bill be now read a second time. The United Kingdom’s internal market has been the bedrock of our shared prosperity for centuries. Since the Acts of Union, the UK internal market has been the source of unhindered and open trade across the entire United Kingdom. It has enabled businesses and individuals to thrive and has been the source of unhindered and open trade across our country. It has helped to demonstrate that, as a union, our country is greater than the sum of all our parts.

Around 60% of Scottish and Welsh exports are to the rest of the UK, which is around three times as much as exports to the whole of the rest of the European Union. About 50% of Northern Ireland’s sales are to Great Britain. When we leave the transition period at the end of this year, an unprecedented number of powers will flow from the EU to the devolved nations and the UK Government. As this happens, and as we recover from Covid, we must ensure that our economy is stronger than ever. The Bill will guarantee the continued functioning of our internal market to ensure that trade remains unhindered in the UK and businesses can continue to operate with certainty. Without the Bill a Welsh lamb producer, for whom almost 60% of the market is the rest of the UK, could end up unable to sell their lamb as easily as before. Scotch whisky producers could lose access to supply from English barley farmers, unnecessarily putting at risk Scotland’s own whisky industry.

This package guarantees a continuation of our centuries-old position that there should be no economic barriers to trading within the United Kingdom. To achieve this, the Bill will do the following. First, it will introduce a market access commitment for goods, services and professional qualifications respectively. This will ensure that the UK can continue to operate as a coherent internal market and maintain the deep integration and strong economic ties that bind the UK together. Secondly, it provides a statutory underpinning for a new office for the internal market, within the Competition and Markets Authority. This office will independently monitor the health of the UK internal market and provide technical advice on issues that may impact it, reporting to the devolved legislatures and to this Parliament itself.

Thirdly, it introduces provisions to ensure that there is a safety net in domestic law to prevent new checks and controls on goods going from Northern Ireland to Great Britain, in line with the Government’s commitment to unfettered access for qualifying Northern Ireland goods. Fourthly, it enables strategic investment in all four corners of the United Kingdom, giving the UK Government a power to provide financial assistance for the purposes of economic development, culture, sporting activities and infrastructure, as well as both international and domestic educational and training activities and exchanges.

Finally, it reserves to the UK Parliament the exclusive ability to legislate for a UK subsidy control regime once this country ceases to follow EU state aid rules at the end of the transition period. This is to ensure that subsidies do not unduly distort competition within the UK’s internal market. Let there be no doubt: this Bill is crucial in providing certainty to businesses, and we must give them that certainty.

Moved by

“As an amendment to the motion that the bill be now read a second time, at end to insert “but that this House regrets that Part 5 of the bill contains provisions which, if enacted, would undermine the rule of law and damage the reputation of the United Kingdom.”

My Lords, I beg to move the amendment in my name on the Order Paper. If I believed in compulsion, and executive compulsion in particular, I would make an order that every member of the Cabinet should read the report from the Constitution Committee and the report from the Delegated Powers and Regulatory Reform Committee and understand what they mean. What I read in those reports we have read time and time again, and, so far, nobody has paid much attention to them. I can sit down now, can I not? Perhaps not.

I do not want to grandstand, but the rule of law is a bulwark against authoritarian incursion, and even the smallest incursion threatens it. When those responsible for making the law—that is, us the Parliament, we the lawmakers, who expect people to obey the laws we make—knowingly grant power to the Executive to break the law, that incursion is not small. The rule of law is not merely undermined, it is subverted. There is one consequence, and the damage is to our standing in the world. We have no real power now, except soft power—the English language and an understanding that we in this country have a traditional belief in the rule of law and we respect it. We hope that, one day, all the countries in the world that do not have respect for the rule of law will have it. Yet here we are, about to tear it into tatters. Our contribution to happier days around the world will be diminished.

I want to make it clear that I passionately believe in the sovereignty of Parliament. I extol it, I discuss it abroad, I explain its advantages over a written constitution, which includes the flexibility that we now have. I also accept that Parliament can make any law it likes; it can criminalise anything it wants to. Let me give you a silly example, which is not that far removed from what has been going on through Covid. I happen to support Leicester City FC. Parliament could make it an offence to be a supporter of Leicester City FC. They could make it an offence for 10 Leicester City FC supporters to gather together to support the club. It obviously will not do that, but in theory it can do exactly what it likes.

The rule of law requires properly enacted laws. I accept that; rule by properly enacted laws is one of the ingredients, but it is not definitive. When the sovereignty of Parliament is tossed against us—fair enough, it is important, it is crucial, it is our constitution—let us remember that every country in the world has a law-making body. Think of one that has not. It will produce the laws by which that country is ruled. Of course, it will. But some constitutionally, properly enacted laws are the antithesis of the rule of law. There are so many examples, but here is one that leaps to mind. Apartheid South Africa, where everything about you as a human being and the way you were treated by the law depended on the accident of birth: the colour of your skin. Depending on the colour of your skin, your rights were more or less; they were certainly different. We tend to forget—we should not—that apartheid South Africa’s abhorrent laws were the result of a perfectly clearly understood constitutional enactment. In law, they were utterly justified in making any law they liked, just as we are. But somebody tell me that apartheid South Africa, with its properly enacted laws, was a place where the rule of law could be found. It was miles away, the furthest constellation in the stars you can imagine.

My Lords, while thanking the Minister for opening the debate, we concur totally with the regret expressed by the noble and learned Lord, Lord Judge. I will, however, leave it to my noble and learned friend, Lord Falconer, to set out our case on this, having allocated some of my speaking time to him, while my noble friend Lord Stevenson will cover the state aid and competition parts of the Bill, as well as the governance, independence and powers of the OIM.

Today will be a notable one for your Lordships’ House, given the expertise that we will hear, and we look forward to the maiden speeches of my noble friend Lady Hayman of Ullock and the noble Lord, Lord Sarfraz, as well as those of my noble friend Lady Andrews, chair of the Common Frameworks Committee, my noble friend Lady Taylor, chair of our Constitution Committee, and the noble Earl, Lord Kinnoull, chair of the EU Committee, whose reports the noble and learned Lord, Lord Judge, has already referred to.

I also look forward to hearing the speech of the most reverend Primate the Archbishop of Canterbury, who, with church leaders from across the four nations, writes in today’s FT of the grave responsibility of Peers, given that the Bill

“will profoundly affect the future of our countries and the relationships between them”.

It is hard to understand how the Government have got so much wrong in a Bill that was long expected as a result of our exit from the EU. Perhaps it is symptomatic of their genetic inability to work with those whose interests are affected by legislation—hence their undermining of the protocol without a word to Irish politicians, and their willingness to break international law, and renounce a treaty, with nary a word to the judiciary or the co-signatories, which led to the EU taking legal action, via a letter of formal notice, for a breach of the good-faith terms of the withdrawal agreement.

My Lords, this Bill is, on a number of grounds, the most dangerous and baffling piece of legislation to come before your Lordships’ House in the 23 years since I became a Member. It is dangerous because, for the first time in that period, a British Government are explicitly legislating to break their word in a treaty recently entered into and in breach of international law. It is baffling because none of its other provisions are necessary at all to meet its ostensible policy goals.

I shall take the dangerous part first—the provisions in Clauses 44, 45 and 47 to allow the Government to override the provisions of the Northern Ireland protocol that could impede unfettered access to Great Britain’s markets for Northern Ireland goods. I pass over the provision in Clause 43(2), which allows a whole raft of new checks, controls and administrative procedures on such trade, which the Government now accept is necessary, and in doing so makes a mockery of the whole concept of unfettered access in the first place. On the offensive provisions themselves, let us be clear on three questions. First, do they indeed break international law? Secondly, in these particular circumstances, is such a breach justified? Thirdly, if not, what should now be done?

On the first question, the answer is clear. The Government have themselves accepted that the provisions

“break international law in a limited and specific way”.—[Official Report, Commons, 8/9/20; col. 509.]

To use a slightly different example from that of the noble and learned Lord, Lord Judge, if I go into a shop and steal a specific and limited number of Rolex watches, I have still committed a theft. Government amendments to the Bill in the Commons would require Parliament to vote before any provisions could be introduced under the offending clauses, but as the Bingham Centre for the Rule of Law puts it, such a vote

“does not alter the fact that Parliament is still being asked by the Government to legislate in deliberate breach of its treaty obligations.”

My Lords, I look forward to hearing, here and online, the contributions to come, especially the maiden speeches of the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Sarfraz.

I also concur totally with the powerful and remarkable speech by the noble and learned Lord, Lord Judge. What we are called to do above all in this country, deeply embedded in our Christian culture and history, is to act justly and honestly. We cannot do so if we openly speak of breaking a treaty under international law, reached properly, on which peace in part of the UK relies. My distinguished former colleague Sentamu, who paid with beatings for his defence of law and justice in Uganda would have spoken trenchantly. I regret his absence.

There are some who claim that I and my colleagues who wrote in the FT this morning are misinformed. But the letter—and this intervention—followed the lead of those who have spent their lives seeking peace in Ireland. Peace is surely something of which religious leaders should speak. We also listened to the Select Committee on the Constitution, to all five living former Prime Ministers, two former Conservative leaders, and distinguished judges, including former Presidents of the Supreme Court and the former Lord Chief Justice of England and Wales, to name but a few.

This country has different characteristics and needs in its regions and nations. They must be reflected in all our relationships if the union is to survive. There is no watertight door in relationships between economics and constitutional issues. They overflow from one into the other. The timing of anything that the UK Parliament or Government do in Northern Ireland is always especially significant to relationships. It is particularly so at present. The revived Assembly is scarcely a year old; 2021 is the centenary of the establishment of Stormont and the creation of the border. Much progress has been made since the 1990s in building confidence and peace, yet it is clear from many visits in the last few years, and clear to anyone who listens, that the tensions continue. Peace and reconciliation need continual reinforcement and continual progress. I will therefore be seeking to work with others for amendments which ensure that the process of peace and reconciliation is pursued and that powers exercised under this Bill, when it becomes law, involve consultation amid the immense complexities of Northern Ireland. I hope we may act on a cross-party basis.

Politics, if it is to draw out the best of us, must be more than just the exercise of binaries, of raw majority power unleashed; it exists to seek truth, to bring diverse peoples together in healthy relationships. Our reputation as a nation, our profoundly good and powerful influence and example, which I know from experience around the world, will suffer great harm if law-breaking is pursued—greater harm than this Bill seeks to prevent. In the Church of England, we are all too clearly aware of the shame that comes with failing morally. Let us not make the same mistake at national level. This House exists to amend and improve legislation, not to derail it, and that must be our urgent aim now.

My Lords, it is a great pleasure to follow the most reverend Primate, and I congratulate him and his most reverend colleagues on their very welcome letter today, with which I, too, wholeheartedly agree.

The European Union Committee published our report on the internal market Bill last Friday. It was the 74th Brexit-related report that we have made since the referendum in 2016. It was unanimous, as all the previous reports have been. Once again, I pay tribute to the outstanding committee staff, working all hours as they do, to such a very high standard over such a long period. The report is short. It deals only with Part 5 of the Bill and its interaction with the Government’s implementation of the withdrawal agreement. It was designed to fit together with the excellent report of the Constitution Committee and its wider analysis of the rule of law issues.

I have said before in this Chamber that there is an inherent tension at the heart of the Ireland/Northern Ireland protocol, essentially in marrying up the aspirations of the recitals with the hard legal texts of the articles that follow. The committee reported in June that there was not enough urgency among the parties in the negotiations, who in a pragmatic way need to seek the compromises to sort this out, protecting, first and most importantly, the Belfast/Good Friday agreement and, secondly, the two mighty single markets involved—those of the EU and the UK. That report also dwelt on the multilayered dispute resolution mechanisms contained within the withdrawal agreement. The Bill before us supplants those mechanisms without their ever having been tried out. We have heard already of the Secretary of State’s clear and repeated statement that, in doing so, the Bill breaches international law. The result, as we report, strikes at the heart of the withdrawal agreement and hence poses a threat to the maintenance of the Belfast/Good Friday agreement itself. It is corrosive, too, to the future relationship discussions, as trust has become a casualty of the arrival of Part 5 of the Bill.

My Lords, it is a pleasure to follow the noble Earl, Lord Kinnoull, and I congratulate him on his committee’s report. Like the noble and learned Lord, Lord Judge, with whose every word I agree, I entirely accept that the sovereign Parliament of the United Kingdom has the power to legislate in breach of international law. That is not the issue that this Bill presents. The question is not whether we can so legislate; the question is whether we should so legislate. I do not often quote the President of the European Commission, but then the President of the European Commission does not often quote Margaret Thatcher. What Mrs Thatcher said was this:

“Britain does not break Treaties. It would be bad for Britain, bad for our relations with the rest of the world and bad for any future treaty on trade”.

That says it all.

I was surprised, nay astonished, that my noble friend the Minister did not deal with nor even mention—unless my hearing has totally failed me—that Part 5 is in breach of international law. The admission by the Secretary of State for Northern Ireland in another place that it is in breach was not, as was suggested by one of my noble friends in the recent debate in Grand Committee, merely a “clumsy” form of words: those words were read from a brief; they were prepared; they were premeditated; they were deliberate; they represented the Government’s clear intention, and, as far as I am aware, the Government have not sought to resile from them.

It was suggested that the dispute resolution provisions in the withdrawal agreement would be activated in parallel with the activation of the provisions in the Bill, but I draw your Lordships’ attention to Article 168 of the withdrawal agreement. It is short, so I shall read it in full:

“For any dispute between the Union and the United Kingdom arising under this Agreement, the Union and the United Kingdom shall only have recourse to the procedures provided for in this Agreement.”