Brexit: Lords defeat government in row over devolved powers

The government has suffered fresh defeats in the Lords over its blueprint for protecting trade between different UK nations after Brexit.

Peers again pressed for the Internal Market Bill to give Scotland, Wales and Northern Ireland a greater say over cross-border trading rules.

Opponents of the bill argue it will centralise power in London after the UK regains certain powers from the EU.

UK ministers say the bill is needed to help firms trade across the country.

After the Brexit transition ends on 1 January, the devolved governments will gain powers in areas such as animal welfare currently regulated at an EU level.

But in a bid to protect cross-border trade, the Westminster government says they will have to recognise standards drawn up elsewhere in the UK.

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The Scottish and Welsh governments argued this would undermine their ability to make their own rules.

Opponents have also claimed the bill will stymie future planned discussions to agree UK-wide standards, by effectively giving Westminster the final word on which standards should be allowed.

On Wednesday, Labour, Lib Dem and crossbench peers again voted to amend the bill to allow devolved administrations a wider remit in diverging from UK-wide rules.

They also approved amendments to give them a greater say over a new UK fund to replace EU regional spending, and in drawing up rules governing state support for businesses.

The latest defeats came despite an offer from the government to increase consultation with the devolved governments before it can enforce a UK-wide approach.

It is the latest stage in a tussle with the Commons over the bill, which will now have to decide whether to overturn the Lords' latest changes.

It also comes as the Senedd in Cardiff voted to reject the bill, after claims from Labour it would "neuter" devolution.

Opposing the amendments, Cabinet Office Minister Lord True argued they would bring increased uncertainty for businesses.

He added they would prevent the UK government from regulating to ensure good from one part of the UK can continue to be sold in another, even where there is an "urgent need to do so".

But he said ministers would "continue to reflect further and continually on these matters," ahead of its return to the Commons.

Northern Ireland clauses

Peers also voted to remove controversial sections from the bill which would have allowed ministers to override the UK's Brexit divorce bill.

The government agreed to drop the clauses on Wednesday, following an agreement with the EU over how trading rules relating to Northern Ireland's borders should work in practice.

The clauses - which would have allowed ministers to breach international law - had threatened to jeopardise ongoing talks between the UK and the EU over a post-Brexit trade deal.

Peers have previously sought to take them out of the bill, only to see them later reinserted by MPs.

But Lord True said the agreement on Wednesday meant they were "no longer needed," and the government was happy for them to be removed.

Labour's shadow attorney general Lord Falconer of Thoroton said: "I'm glad that the government has retreated.

"I do think it's damaged the position of this country, and I also think it shows a terrible misjudgement."

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