Item 7 on our agenda this afternoon is the legislative consent motion on the United Kingdom Internal Market Bill, and I call on the Counsel General and the Minister for European Transition to move the motion. Jeremy Miles.

Motion NDM7497 Jeremy Miles

To propose that the Senedd, in accordance with Standing Order 29.6, agrees that provisions in the United Kingdom Internal Market Bill, in so far as they fall within the legislative competence of the Senedd, should be considered by the UK Parliament.

Motion moved.

Deputy Presiding Officer, we have held back until what appeared to be the very last moment to arrange this debate, in the hope that the Government in Westminster would have acknowledged the strength of the opposition to this Bill and would have proposed some compromises on that. Unfortunately, as we know, the main characteristic of the current administration is its arrogance and, therefore, that hasn't happened. So, we shouldn't be surprised that, in considering the House of Lords amendments, they have used their majority in the House of Commons to overturn all of the amendments that the crossbenchers and opposition parties had passed during many days of forensic inspection.

I would like, if I may, just to pay tribute to the way in which peers from across the House have been willing to work with us to mount a sterling defence of the devolution settlement, which the UK Government seems willing to trash. In particular, I would like to thank Lord Thomas of Cwmgiedd, Baroness Finlay of Llandaff, Lord Wigley and Lord Bourne of Aberystwyth, as well as the Labour opposition and Liberal Democrat front benches.

Despite these efforts, it seems certain that the Bill that will be presented for Royal Assent in a few days' time will be deeply damaging to this Senedd and to our nation. The Legislation, Justice and Constitution Committee, the External Affairs and Additional Legislation Committee and the Finance Committee have all recognised in their reports the deeply damaging impact of this Bill on devolution, to the extent that the Legislation, Justice and Constitution Committee have broken with their precedent to recommend that the Senedd should not give its consent.

Let me give just five reasons why, as a Government, we believe every Member of this Senedd should vote against giving legislative consent. Here, I'd like in particular to address my comments to the Conservative benches. Firstly, why would any Member of this Senedd elected to take decisions on devolved matters that reflect the views of those who elect them agree to legislation that neuters their ability to do just that? The market access principles mean that any product can be legally sold that is legally sold in any part of the UK; whether or not it complies with standards here in Wales, it must be able to be put on the market here. We cannot even demand that it be labelled differently.

This is not just about hypothetical instances. As Members will be aware, we have recently consulted on banning nine types of single-use plastic in Wales. We've not yet completed the analysis of the responses, so I won't prejudge matters, but if we did decide—or the new Government in the new Senedd term, more likely—that they wished to do so, that could not meaningfully happen if this Bill is enacted.

Let me quote the Government Minister, Lord True, in the House of Lords only two weeks ago: 

'New restrictions on the sale of goods, including goods made from plastic produced in or imported into one part of the UK, will be subject to the mutual recognition principle for goods unless an exclusion...applies.'

'goods...sold lawfully elsewhere in the United Kingdom will not be denied access to other parts of the UK market unless an exclusion applies. Consumers are of course not required to buy them.'

Rather avoiding the point that for consumers to make choices they need information, and the restrictions against labelling in the Bill would, of course, prevent that.

Secondly, consider the financial assistance powers that have been shoehorned into the Bill, the only thing they have in common with the remaining parts being that they reflect the same intent of undermining devolution. The Finance Committee eloquently articulated serious concerns about these provisions. They would enable UK Ministers to fund interventions in Wales in wholly devolved policy areas in ways that go around, or even run completely contrary to, the political agenda set by the Welsh Government on behalf of the people of Wales.

I'd like to quote another Conservative, Lord Dunlop, former Scotland Office and Northern Ireland Office Minister:

'if the power in the Bill is to be fully effective, it will be important for the UK Government to work in partnership, not conflict, with the devolved Administrations and representatives of local communities throughout the devolved nations. It would be a retrograde step...if Ministers sought to substitute local priorities with the priorities of the centre, uninformed by local views. In my experience, the maxim "The man in Whitehall knows best" is never a popular one, and certainly will not cut much ice in Scotland', he said. Nor in Wales either, I say.

There are plenty of ways in which a Conservative Government will want to thwart the priorities of a Welsh Labour Government, but imagine a future Conservative Government in this Senedd—not a prospect I relish—wanting to take steps and a more liberal Government in Westminster overruling that agenda. I'm sure Members on the Conservative benches would not regard that as acceptable.

Thirdly, the UK Government have claimed that the Bill does not contain new restrictions, and, indeed, creates new devolved powers. I would like to report to the Chamber that I'm still waiting to be shown which clause enhances the powers of this Senedd. Members will not be surprised to hear that that hasn't been pointed out. Clause 50 specifically inserts a new reservation of state aid and subsidies into Schedule 7A to the Government of Wales Act 2006—a new and fresh limitation on the powers of this Senedd.

Fourthly, Dirprwy Lywydd, it's not as if we haven't tried to put forward and alternative approach to securing the internal market in a creative way that takes account of any legitimate concerns. We've proposed an approach that puts the common frameworks at the heart of the internal market, but gives the UK Government the right to ask Parliament to introduce market access principles in the narrow set of circumstances as a fall-back where the four Governments have failed to reach agreement. Common frameworks are there to align, respect devolution, while enabling a competitive internal market. The rejection by the UK Government of this approach is eloquent testimony to the fact that their motivation with bringing forward this Bill, and persisting in the teeth of such widespread opposition, has little to do with the concerns of businesses and everything to do with the desire to centralise power and hobble the freedom of this Senedd to do the job it was elected to do.

And this is the fifth reason: the clearest clue that anyone needs that this legislation is intended not so much as market regulation, but instead is constitutional legislation, is the blanket prohibition across the entire Bill through the protected enactment clauses—an exclusion of this Senedd's power to modify any aspect of it, whether it's devolved or not. Not a restriction, of course, which applies to Parliament. It is truly exceptional for a Bill to be put beyond the reach of the Senedd in its entirety. It's a Bill that purports to be about market principles, but is in fact a stealth attack on the constitution. I hope Members will agree that that is outrageous.

Dirpwy Lywydd, this Bill is an attack on devolution, it has no place in the regulation of the internal market, it has no place in the modern, devolved constitution of the United Kingdom, and it will hasten the break-up of the union if it becomes law. I urge all Members of the Senedd to reject the motion and deny the Bill our consent.

I now call on the Chair of the External Affairs and Additional Legislation Committee, David Rees.

Diolch, Dirpwy Llywydd. The External Affairs and Additional Legislation Committee has undertaken detailed analysis of this Bill and sought evidence from a variety of experts. Following that work, it has come to the conclusion that the Senedd should not grant its legislative consent for this Bill.

We arrived at this view because we found that (1) the Bill is unnecessary for the management of the UK's internal market; (2) the Bill will reduce the Senedd's legislative competence; (3) the Bill will reduce the effect of many future laws passed in the Senedd, limiting the ability of the Senedd to deliver on priorities for the people of Wales; and (4) the Bill seeks to impose the UK Government's will on Wales in a way that disproportionately favours the interests of England. There are clear policy alternatives to the approach taken by the UK Government, and no convincing case for the Bill's necessity has been made.

Before moving to explain the reasons behind the conclusions we have drawn, I would like to emphasise that we have no objection to the development of a means to manage the UK internal market. We do, however, believe strongly that these means should be developed collectively by the Governments and legislatures of the four nations of the UK on the basis of co-design, consent and respect for the devolution settlements. If the Senedd does agree to withhold its consent today, and the UK Government proceeds, then this Bill would represent the imposition of the policy preferences of one nation on other nations against their will—clearly a lack of respect for this institution and for devolution as a whole. We concluded the Bill is unnecessary because there are already a range of mechanisms for managing policy divergence after leaving the transition period, including the common frameworks programme, international obligation duties in the devolution settlements, and powers that were provided by the European Union (Withdrawal) Act 2018.

In relation to the Senedd's legislative effectiveness following the introduction of this Bill, it is a statement of fact that the Bill will reduce the Senedd's competence in two ways: the Bill seeks to insert a new reservation under Schedule 7A to the Government of Wales Act relating to state aid, and provision in the Bill seeks to make it, once an Act, a protected enactment, that is making it unamendable by the Senedd in future. It's also a fact that the Bill provides no new powers to the Senedd. This was confirmed by a senior UK Government Cabinet Office official at our meeting on 12 November, who was attending in support of Lord True, the Minister of State for the Cabinet Office. Perhaps the most significant effects on devolution arise from the implications of Parts 1 to 3 of the Bill on market access, which will place a new practical limit on the effect of devolved legislation. This was confirmed by the UK Government in its original explanatory notes to the Bill, which said the Bill will, and I quote,

'create a new limit on the effect of legislation made in exercise of devolved legislative or executive competence.'

The provisions in the Bill are more limiting than the current market access principles in the EU single market, therefore reducing the freedom that the devolved legislatures currently have to develop distinctive and innovative policies. The practical effect of laws passed by the Senedd will be diminished, reducing the ability of the Senedd and the Welsh Government to deliver on priorities for the people of Wales.

Our fourth reason for recommending the Senedd withholds its consent is that the Bill seeks to impose the UK Government's will on Wales in a way that disproportionately favours the interests of England. And what do we mean by that? Well, the size of the English market compared to the other nations of the UK is such that the effect of the market access principles would disproportionately favour English policy choices over those of the other nations of the UK. Making the Bill a protected enactment means the devolved legislatures cannot amend the Bill's provisions as they relate to the nations. But the UK Government, acting as it does on behalf of England in devolved areas of policy, is not restricted from making changes to the Bill through the UK Parliament in future. The Bill provides wide powers for UK Ministers to make substantive changes to the Bill once enacted, and, by extention, the internal market, through secondary legislation with little parliamentary scrutiny.

For independent advice on monitoring the UK internal market, Part 4 of the Bill creates the office for the internal market that sits within the Competition and Market Authority. Now, this is a non-ministerial department of UK Government, with a chair and board members appointed by the Secretary of State for Business, Energy and Industrial Strategy. Again, we cannot forget that the UK Government acts for England only in devolved areas of policy, yet it retains powers to adjust the rules and appoint those tasked with monitoring the application.

As regards Part 5, financial assistance powers—and I'm sure the Finance Committee's report stresses this—the Bill gives the UK Government new powers to fund activity in policy areas devolved to Wales. We see no logical link between the requirements for such powers and the operation of a UK internal market. Furthermore, the implications of these powers on the Welsh block grant remain unclear. Again, there is an inherent imbalance in this arrangement, with the UK Government acting as the Government of the UK and the de facto Government for England-only devolved areas.

I now call on the Chair of the Legislation, Justice and Constitution Committee, Mick Antoniw—. Actually, I think it's frozen, but he was at time anyway. So, I am going to move on. I have to say that we have an exceptional number of speakers, and you're not all going to get in, and that includes people having to stick to very strict times. So, if I can call—. It's the Legislation, Justice and Constitution Committee's Mick Antoniw, but it looks like Zoom has gone down. So, can we have a two-minute technical break, then, while we look at what's happened to Zoom, please?

Plenary was suspended at 16:52.

The Senedd reconvened at 16:57, with the Deputy Presiding Officer in the Chair.

We will reconvene. If I can ask the Chair of the Legislation, Justice and Constitution Committee for his contribution—Mick Antoniw.

Thank you, Dirprwy Lywydd. The United Kingdom Internal Market Bill is a piece of constitutional legislation that will have far-reaching implications for devolution and the stability of the UK and will drive the final nail into the coffin of the Sewel convention. It is promoted by the UK Government as a Bill that is solely economic in character. This is a false and a misleading description. The Bill is a piece of centralising legislation that undermines devolution and allows UK Government Ministers to override devolved responsibilities. The Counsel General told the committee that the Bill starts from the wrong perspective, and we agree. The Bill breaches the principles for establishing common frameworks to accommodate a UK internal market that were agreed in October 2017 by all four Governments of the United Kingdom. With virtually no proper engagement or consultation with the devolved Governments prior to publication, it is, as described recently in an evidence session to the House of Lords Constitution Committee, 'a constitutional ambush'.

We all recognise the need for a UK internal market after leaving the EU. However, the Bill was introduced only four months before the end of the transition period, with devolved Governments excluded from its initial preparation. It is rushed, poorly thought through and heavy handed. The Bill will impact negatively on the Senedd when it seeks to legislate in new areas in relation to goods and services. The effect of the Bill on the Senedd's powers was highlighted by the House of Lords Constitution Committee report, which noted that the implications for devolved competence will depend heavily on the minimum standards for goods and services in England as the economically dominant part of the United Kingdom. The Bill will make it harder to determine easily whether it is practical to legislate. Not only that, but the Bill introduces a perverse incentive for the Welsh Government and Senedd to avoid innovation in policy and law making. It, in effect, will require the Welsh Government to ascertain legislative agreement prior to introducing legislation, even if there is a Government manifesto commitment to introduce such legislation. Without doubt, it would also greatly restrict the Senedd's capability to develop a cohesive and a comprehensive legislative programme without UK Government consent. This point was confirmed by the original explanatory notes to the Bill, which stated,

'the Bill's provisions create a new limit on the effect of legislation made in exercise of devolved legislative or executive competence.'

Of course, these same arguments apply to devolved subordinate legislation made in Wales as well, and they also apply to backbench Members seeking to introduce their own legislative proposals, either through tabling amendments to Bills that have been introduced in the Senedd, or through winning the ballot for a Member's Bill. It seems fundamentally flawed to us that the Senedd will be effectively dissuaded from passing laws within its own legislative competence by virtue of this Bill, even when those new laws are designed to meet the specific needs of Wales and its citizens, and it adds an unnecessary barrier to the Senedd's ability to make its own laws.

A further limit on the Senedd's ability to make law is the reservation of state aid to the UK Government. The implementation of state aid in Wales has been an important part of devolved Welsh policy for many years. Of equal and substantial concern are the provisions in the Bill that would permit the UK to spend money and fund projects in devolved areas in Wales. They are exceptionally broad and invasive powers with no logical connection to the operation of the internal market and are a recipe for confusion, and, it is, of course, not just—[Inaudible.]

Right. Again, it appears that the connection has gone down. Okay, so we'll have to have another short break while ICT look at this. Thank you.

Plenary was suspended at 17:02.

The Senedd reconvened at 17:27, with Deputy Presiding Officer in the Chair.

Right, so now we will try and reconvene again. As I say, I will go back to the Chair of the Legislation, Justice and Constitution Committee, Mick Antoniw, who has a minute of his speaking time left. Mick Antoniw.

Thank you, Deputy Llywydd. As a cross-party constitutional committee, our function is to assess the probity and constitutional impact of this Bill, so as a committee we rarely recommend to the Senedd whether or not it should grant legislative consent. On this occasion, we're of the view that we have an obligation to make a specific recommendation to the Senedd. We have concluded that the Bill would have a profound effect on the devolution settlement and present a risk to devolution. For that reason, we recommend that the Senedd should not give its consent to the Bill in its current form. Thank you, Deputy Llywydd.

Thank you very much. Can I now call on the Chair of the Finance Committee, Llyr Gruffydd?

Thank you very much, Deputy Presiding Officer. I am pleased to speak in this debate today, and given the significance of this legislation, we as a committee explored the financial considerations of the Bill with the Minister for Finance and Trefnydd. The committee reached a majority conclusion that the constitutional and financial implications of the internal market Bill passing in its original form would undermine the devolution settlement, leading to the prospect that the funding available through the Welsh block grant could be reduced.

Whilst we welcome the Welsh Government’s approach in seeking support through the House of Lords for its model amendments to the Bill, we highlighted our concern that changes pursued through the Lords could be reinstated once the Bill returned to the House of Commons, and that indeed is what happened yesterday, when some of the financial aspects of the Bill that had been removed were reinstated by the Commons.

We have a number of concerns about the Bill as it stands, and I will go through some of them now. First of all, the possibility of the UK Government spending in devolved areas and in such a way that is not compatible with the Welsh Government’s strategic intentions. We heard from the Minister that the financial assistance powers within the Bill could be used for a very broad set of purposes, including in devolved areas. The Lords removed this clause. However, it was reinstated yesterday in the Commons. In our view, these powers are not necessary, and we believe that they will undermine spending decisions made here in Wales.

Part 6 of the Bill provided UK Government Ministers with the power to directly fund any person on a wide range of matters that are currently—[Inaudible.]

I really am sorry about this. We need the technicians back in and we need to look at what's going on.

Plenary was adjourned at 17:45.