It is a pleasure to open this debate on behalf of Scottish Labour. I would like to thank the Committee and its members for this report. It is an in-depth and considered look at a topic with many strands, and the Committee has done well to pull them all together.
I would also like to thank the many witnesses who contributed to the Committee’s inquiry. The sheer breadth of expertise (heard from) is impressive and has provided us with a considerable resource as we consider these matters in future.
The UK Internal Market Act has clearly been something of a watershed moment. Its passage not only signalled the effective end of the immediate Brexit process, but also inaugurated a new and uncomfortable era in which we in the devolved Parliaments and assemblies of this country now find ourselves.
The Committee’s report does a good job in highlighting the tensions which are now at play between the devolved institutions and Westminster and provides some constructive commentary on how they may be mitigated in the future.
I think it is necessary to briefly look back at how we got into this situation. It was clear to everyone when the UK left the European Union that certain powers would be repatriated. It would have made sense, given that situation, for the UK Government to engage with the devolved governments and institutions in order to arrange how this would work with the devolved settlement.
The fact that they did not do so – and we are now in this situation of considerable tensions within the devolution settlement – illustrates how devolution works best when Westminster and the devolved nations work together rather than apart. I hope that future governments learn the right lessons from this experience.
It is unfortunate that we find ourselves in a situation where this Act of the UK Parliament has been passed notwithstanding the withholding of legislative consent by both Scotland and Wales, but we are where we are.
Scottish Labour remains committed to devolution and allowing devolution to work well, and so I shall move to the tensions at the heart of this report and its suggestions for how they may be resolved in the future.
On the tension between free trade and regulatory divergence, the Committee’s view appears to be that the UK Government has got the balance very wrong. We in Scottish Labour agree.
We agree that there needs to be room for Scotland to innovate, both in policy and in its economy, and that the UK Government has instead fallen too harshly on the side of being prescriptive about what must be done in devolved areas.
We are concerned that the Act in effect enforces the Tory free market view of the world, stifling Scotland’s ability to set its own standards through public procurement practices.
Thanks to its emphasis on non-discrimination and mutual recognition, Scottish businesses – particularly in the agricultural sector – could be put at risk if the Tories pursue their deregulatory worst instincts and insist on lowering the standards that we have been used to over the last few decades.
I am, however, pleased to see that in examining this tension, the Committee has also underscored the importance and economic benefits of open trade across the UK. I note that the Committee heard evidence of examples of complete or near-complete integration in supply chains within the UK.
It surely therefore follows that the imposition of trade barriers within Great Britain, as would inevitably happen under the Scottish Government’s plans for independence, would cause significant disruption to those supply chains and to the wider economy.
Certain Members may not like to hear it, but it is the logical consequence of having such depth of integration within our economy.
The Committee’s report also makes it clear that there is room within the Common Frameworks to work through some of the tensions that have been caused to the devolution settlement by this Act but, crucially, highlights the power imbalance this risks causing between executives and legislatures across the UK.
It is perhaps not surprising that it is committees like those of this Parliament and the House of Lords in Westminster which are highlighting this tension and the distinct lack of transparency in the intergovernmental systems.
Put simply, we in this Parliament – and legislators across the UK – need to be able to see and comment upon the processes that go on in the Common Frameworks. So, too, do other stakeholders in our economic and regulatory environment.
We cannot possibly repair confidence in our devolved settlement if all the work to do so is done in the dark, away from the eyes of those with interests in the system and how it is supposed to function.
I am grateful to the committee for all its work in bringing these concerns to the Parliament, and we on these benches look forward to engaging with its ongoing work in addressing these matters in future.