Net Zero, Energy and Transport Committee

Meeting date: Tuesday, September 14, 2021

Official Report 620KB pdf

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Environment Bill

Agenda item 3 is evidence from the cabinet secretary on the supplementary legislative consent memorandum on the UK Environment Bill. Welcome back, cabinet secretary. You are joined by Scottish Government colleagues who are appearing remotely: Charles Stewart Roper, head of the environmental governance and strategy unit, and Sophie Humphries, head of the environmental principles and governance team. I understand that you wish to make an opening statement.

The story of the UK Environment Bill is very much a play in two acts. In the first act, under the guidance of Michael Gove during his time as Secretary of State for Environment, Food and Rural Affairs, the bill was developed in a manner that broadly respected devolved competence. There was considerable consultation at official and ministerial level as proposals were considered in each country of the UK to implement national systems of environmental principles, strategy and governance, in large part to replace arrangements at the EU level.

We differed in that we had no desire to leave the EU arrangements, but the UK Government appeared to be prepared to respect devolved competence. In particular, it was clear that it would respect the Scottish Parliament’s responsibility for putting in place arrangements for Scotland.

In addition, a number of regulatory provisions were designed to extend to devolved competence in Scotland—most significantly in waste and resources. Those measures were properly designed with provision for consent to be required from the Scottish ministers for any regulations made by UK ministers that extended to devolved competence in Scotland.

In the previous parliamentary session, the ECCLR Committee had concerns about the Scottish Parliament’s involvement in the process of consent giving. Those concerns were addressed through the new protocol. The Parliament gave consent to those measures after due consideration and debate. Recently, minor amendments have been made to the provisions to make them more effective and correct omissions. They are clearly within the terms of the existing consent motion, and I shall write shortly with details on them.

We turn to the second act of the UK Environment Bill. During this phase, it has become clear that the UK Government is using the bill as a small but significant front in its assault on devolved competence. A key figure in that assault is none other than Michael Gove, in his role as Chancellor of the Duchy of Lancaster. Two provisions that are of particular concern have been added to the bill through UK Government amendments. They are described in the supplementary legislative consent memorandum that was lodged in July.

A UK Government amendment that was passed during House of Commons stages introduces a new due diligence regime for the use of forest risk commodities in commercial activities. Although that is broadly in line with Scottish Government policy on reducing the overseas impact of our consumption, the proposal was developed without the Scottish Government’s involvement and does not recognise that the policy is within devolved environmental competence, as it has a clear environmental purpose.

A UK Government amendment that was passed during consideration in the House of Lords specifies that the UK policy statement on environmental principles should apply when UK ministers exercise their reserved functions in relation to Scotland. The amendment also disapplies the duty on UK ministers in our UK Withdrawal from the European Union (Continuity) (Scotland) Act 2021 to have due regard to guiding principles on the environment in those circumstances.

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The Scottish Government considers that the duty in the 2021 act can apply to UK ministers in Scotland when they are making policy whether it does or does not relate to a reserved matter. The application of environmental principles has a clear environmental purpose and is therefore within devolved competence.

The amendments to the UK Environment Bill on forest risk commodities and environmental principles are an unwarranted attack on the Scottish Parliament’s devolved competence. They run counter to the understanding between Administrations as the bill was being developed.

It has been understood since the institution of this Parliament that the purpose test is a key test of devolved competence. Both the amendments that I described cover policies whose purpose is clearly environmental protection and which are clearly within devolved competence.

Since the UK Government is adamant that it does not need legislative consent for the amendments, it is pressing ahead without seeking this Parliament’s consent. However, it is important that we do not let that pass without comment and that we continue to assert the correct role of this Parliament in areas of devolved competence.

I am more than happy to respond to any questions that the committee might have.

Thank you for those opening remarks. As you indicated, we are looking at a fairly technical area, so the questions will probably be quite brief. The committee does not want to go too much into the legal interpretation of what the amendments involve.

Amendment 80 relates to the guiding principles on the environment. Paragraph 17 of the Scottish Government’s supplementary legislative consent memorandum states that the UK Government changed the previously agreed approach with regard to the amendment. I want to check what form that previously agreed approach was in. Was it a formal or legally agreed approach for the amendment between the UK Government and the Scottish Government?

The discussions predate my involvement in the portfolio, so Charles Roper is probably best placed to explain how the approach was taken forward between ministers and officials at the early stage in the bill’s development. I understand that a clear principle was agreed at an early stage when the UK Government proposed the bill. Mr Roper can possibly say a bit more about that process.

I am happy to do that. There was no formal agreement or memorandum on how such things would be developed; there was just a series of discussions and correspondence at official and ministerial level over a number of months. The manner in which the UK Government consulted on its proposals and the nature of its proposals in the bill as introduced demonstrate that the intention at that time was for the proposals to extend only to England. The UK Government has since changed its mind. It is clear that this is a change of UK Government policy, as the UK Government has had to achieve it through amendment rather than through the bill as introduced.

From paragraph 15 of the Scottish Government’s supplementary LCM, I understand that the UK Government subsequently made it clear during the passage of the continuity bill that, on reserved matters, the UK guidelines would apply . Am I correct in that assumption?

You are correct that there was correspondence between ministers during the passage of that bill, but our ministers did not agree with the interpretation that was placed on the limits of competence at that time and pressed ahead with the measures as they are in the 2021 act, which we believe correctly reflects devolved competence. UK ministers made their view clear during the passage of our continuity bill, but that was subsequent to the introduction of the UK Environment Bill, with the measures as the UK Government had designed them at that time.

Am I right in thinking that, in the absence of a formal or legal agreement with regard to the guiding principles, the Scottish Government’s view is that section 14(2) of the 2021 act qualifies section 29 of the Scotland Act 1998? In other words, section 14(2) moves to devolved competence powers that would otherwise be reserved under the 1998 act.

No. As the supplementary memorandum makes clear, we think that the measures in the 2021 act as they apply to UK ministers acting in areas that are and are not reserved fall within devolved competence under the 1998 act. Our interpretation of the 1998 act is that everything in the 2021 act should be regarded as falling within devolved competence, as it has a clear environmental purpose. The UK Government has decided that it does not agree with that view and, through its amendments, it is taking measures to impose its interpretation. Our interpretation was not that the measures shifted the balance between devolved and reserved competence but that they clearly fell within devolved competence.

I am not clear about that response, as your connection cut out slightly. My point is that, as I understand it, the amendment to the UK Environment Bill deals with reserved matters. However, the Scottish Government’s supplementary LCM suggests that that has changed as a result of the 2021 act. I am trying to understand the legal rationale behind the impact of that act on the issue.

I will draw an analogy, if I may. Nobody denies that defence is a reserved policy area but, if the Ministry of Defence wanted to abstract water from the Scottish environment, it would have to apply for permits. When water is abstracted, the primary concern is environmental and the purpose of controlling the water environment is environmental, too.

Our argument is that the environmental principles have a clear environmental purpose. The policies that they apply to are clearly in reserved areas, but the environmental purpose behind the environmental principles means that the principles that should apply to the UK Government when making law in reserved areas in Scotland should be our set of devolved environmental principles. The competence is devolved, regardless of whether the decision that is being made falls within reserved competence.

Right—

On that point, Ms Pow MP, the parliamentary under-secretary of state at the Department for Environment, Food and Rural Affairs, wrote in a letter to MPs on 10 November 2020 that the proposals were “legislation to protect rainforests”. They had an environmental purpose—it was not about business regulation.

I think that you are referring to clause 107, which relates to the due diligence required by business. I will come on to that later.

I am referring to the principal purpose of the legislation. The purpose of the legislation and the measures is “to protect rainforests”.

I understand that, but if your legal argument is based on a letter, I am not, with respect, convinced.

Do you seriously not take the word of a Government minister in a letter to MPs on this matter as being a good source of evidence?

Well, the term “rainforests” can be open to interpretation. I do not think that we should be picking out one word in a letter—

I am not picking out just one word—I am picking out four: “legislation to protect rainforests”. That is in a letter to MPs from the minister who is dealing with the legislation. I do not know what is unclear about that.

What is unclear is that, although we hear precisely that the area involves reserved powers—

No—is that your view?

That is what your colleague just mentioned.

Is that your view?

I am repeating what your colleague said, which is that the powers are in—I quote—“reserved areas”.

Business regulation is reserved, but the environmental purpose that we are discussing involves a devolved area.

We are talking about amendment 80, which deals with the guiding principles. Business regulation is dealt with in clause 107.

That is correct.

You are confusing your amendments.

I am sorry—I was not aware that you were referring to the clause that is about the general principles.

If you had been listening, perhaps you would have—

The principle behind the bill is environmental.

I appreciate that, but you are mixing up your amendments.

I have asked all my questions on amendment 80. We will come on to clause 107, to which the other amendments in question apply.

I have questions about the whole thing. Was the Scottish Government developing a set of due diligence measures on forest risk commodities last year, when the bill was being developed?

The question predates my involvement; Mr Roper or Ms Humphries could respond.

I am interested to know whether active policy work was under way in the Scottish Government.

The approach is consistent with our policy, which is to reduce the import of forest risk products, to take firm measures that will reduce the potential for imports and to ensure that businesses are mindful that they should not import forest risk products.

As the cabinet secretary said, we have clear policies about reducing the global impact of consumption in Scotland. We were not developing specific policies on such forest risk commodities. Given the nature of such regulations, a co-ordinated approach might have been desirable, as with some other regulations. However, we strongly contend that the UK Government should not legislate in the area without consent, as it involves the regulation of business for an environmental purpose.

You will know that European policy development is taking place and that the European Commission is to propose a directive on sustainable corporate governance this month or next month. Why is co-ordination not happening? Why is there no common framework on this policy and many others? Has a conversation taken place about the issue, given that both Governments know that the European Commission is looking to make progress on it? That is in line with the Scottish Government’s policy and with what the UK Government wants to progress on. Between the two Governments and the European Commission, there is a need for co-ordinated progress. [Interruption.] Why is there a breakdown in communication—is it the microphones?

That is a much more general question about corporate governance and corporate social responsibility—

To be fair, the question was specifically about this policy.

The UK Government went ahead and developed the policy on forest risk commodities without the Scottish Government’s proper involvement. I agree that there are wider policy developments, but I do not have to hand the information to comment on them.

Has an attempt been made to engage the UK Government on the substantive policy area? If so, what was the reaction? Why are we now looking at a policy that the UK Government produced without any Scottish Government involvement?

Again, I do not have that information to hand, but, if the cabinet secretary wishes, we could offer to write to the committee to provide more information about the wider policy context of discussions on corporate responsibility.

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I will hand over to Fiona Hyslop in a second, but, cabinet secretary, I want to follow up a comment that you made about clause 107. You said that it related to the importation of forest risk commodities, which is what it says in the legislation. Are you saying that the amendments will relate only to the importation of such commodities?

That is their primary purpose. Their objective is to reduce the risk of the importation of these goods.

That is based on the global resource initiative task force’s recommendations, which I believe that the Scottish and UK Governments support.

Yes. It is based on the principle of reducing the environmental risk, to rainforests in particular, that is associated with forest risk products.

I know that, technically, we have rainforests in Scotland, but I assume that, here, “rainforests” are being referred to in the sense of rainforests worldwide, to promote sustainable international trade.

No, the purpose is to reduce the risk of the importation of products that are made from wood from rainforests, for environmental reasons—because of the environmental risk that that poses.

To go back to the question of purpose, if, as it would seem, the purpose is largely to control trade with other countries and to impose certain conditions and due diligence requirements on trade from other countries, does that not sound like a trade issue, which, generally speaking, is reserved?

On the basis of the discussions that we had with the UK Government, that was not its view—it was not its argument.

Therefore, the UK Government thinks that it is a devolved issue.

No. Its argument was that it is to protect rainforests—

Are you saying that that is part of the global resource initiative, which is an international agreement?

We can try to dance on the head of a pin for as long as you like—all afternoon, if you wish—but UK Government ministers were very clear in their correspondence with MPs about the primary purpose of the legislation, which is, to quote the correspondence, “legislation to protect rainforests”. It is not legislation to promote trade or to reduce trade between one country and another or to deal with trade issues. It is not legislation to deal with better business regulation or to remove business regulation in particular areas. It was quite clearly said that it is legislation to protect rainforests.

However, you know that it is based on the global resource initiative, which is about international sustainable trade. You refer to it as being largely or exclusively about imports. That sounds to me like a reserved matter.

If you are trying to find a bolthole to help your colleagues in Westminster to basically ride roughshod over the powers of this Parliament, that is your choice. All I am trying—

No, I am trying to help you with your own analysis, cabinet secretary.

What I am setting out is very clearly what the UK Government’s position is, which is that it is a piece of legislation to protect rainforests.

Whereas, your position is that it sounds like an international trade provision—

That is your position.

I will refer you to the record. You mentioned international trade quite a few times in your response. I have no doubt that that will be settled, it is hoped with lawyers in the room—some of us are lawyers; some of us are not. That is all that I have to say for the time being. Fiona Hyslop has a question.

Of course, our responsibility is to make a determination on legislative consent, which is what our report to the chamber and the Parliament will be.

There are two separate issues here, one of which is about the Environment Bill itself and the issues around the guiding principles that have been introduced. I was struck by the reference in paragraph 24 of paper 3 to the original UK Government consultation on the environmental legislation, which said:

“Our starting point is that the statutory statement of environmental principles and the environmental body should cover England and environmental matters that are not devolved. This consultation therefore relates only to areas for which the UK government is responsible.”

Clearly, in the characterisation of it being a bill of two halves—or a play in two acts, as Michael Matheson said—there has been an attempt to apply UK principles on the environment to reserved UK bodies, which everyone acknowledges as reserved, when they act for a purpose in Scotland. If I am correct, the primary issue is about bodies acting for a purpose and impact in Scotland: for example, when an obviously reserved organisation, such as Her Majesty’s forces, does something that affects, for example, water discharge. The relationship between devolved and reserved areas might be more obvious in that example, but it will come down to an interpretation of purpose, impact and aim. I want you to comment on whether you agree with what I am saying and whether you follow the logic.

The second issue is about something that we all agree with, which is that we all have responsibility for the international environment, whether at nation state level or as a devolved competence. In policy terms, I think that everybody would agree with the purpose of what the bill is attempting to do, but the issue is who has responsibility for the area in question. Again, the issue of environmental standards is obviously a devolved area, but do we interpret that as having an international trade or treaty aspect, or do we see the main purpose being about environmental standards for businesses that operate in Scotland? It can be looked at from different aspects, and I suspect that, like many of those things, it is about which side of the lens or which end of the telescope we want to look at it from. That might be determined in other areas, but is that a reasonable characterisation of what we have in front of us?

It is. On the first aspect, the important issue around the environmental principle is that it could involve a UK-based organisation applying the UK Government’s environmental principle, which, for environmental reasons, is contrary to the position that we have in Scotland on the matter. That effectively means that the UK Government trumps our environmental principles in Scotland in order to enforce its position, even though that might go against our environmental principle, which could result in a negative consequence for us. That is why our view is that the approach is wrong, because it is a devolved matter, and UK bodies should apply the Scottish Government’s and Scottish Parliament’s agreed environmental principle.

In relation to your second point, the idea that a piece of legislation, whose principal purpose is to protect rainforests, is somehow seen as being about trade is, frankly, nonsense. Its primary purpose is environmental, and the long-standing position between the Scottish Parliament and the UK Government is that the primary purpose, which is clearly environmental, is the starting point and everything else is secondary to that. Again, that is the principle that, in this case, is being breached by the UK Government, when it chooses to legislate in an area that, because of its primary purpose, is within devolved competence.

Since members have no more questions, that brings to an end our evidence session. I thank the cabinet secretary again for appearing before the committee.

12:23 Meeting continued in private until 12:49.