United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

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.

Moreover, despite claims that it would strengthen the integrity of the union while upholding the devolution settlements, the Bill actually,

“risks de-stabilising an integral part of the UK’s constitutional significance”,

in the words of our Constitution Committee.

In a letter to the Lord Speaker, Jeremy Miles, the relevant Welsh Minister, describes the Bill as

“an unprecedented attack on the devolution settlement”,

arguing that it would undermine the Senedd’s right to regulate in devolved areas of competence and would explicitly amend the Government of Wales Act. Unsurprisingly, the Senedd’s legislative consent memorandum concludes that, unless the Bill is substantially amended, the Welsh Government would not be able to recommend consent.

A similar reaction led the Scottish Parliament to vote by 90 to 28 against granting legislative consent, with the Scottish Government stating that they could not recommend consent to a Bill that,

“undermines devolution and breaches international law”—

and it looks as if that response has led to a third of Scottish voters being more likely to back independence.

There has been a real issue to resolve, because when we entered the EU in 1973, there was no devolution. But we thought we had achieved a solution with the common frameworks in the Withdrawal Act. Within the EU, common standards, mutual recognition, labelling, testing, professional recognition—or whatever—were decided by consensus across the 28, with MEPs from our four nations signing off the various measures. Our exit repatriated powers to the UK, but they included powers in some devolved competencies.

So how did the Government react? Did they set up a mechanism akin to EU co-determination, designed with the devolved Administrations? Did they build on the common framework efforts already in play? No, they took to themselves significant repatriated powers, annulling elements of the devolved settlement, to replace a system that had evolved slowly and by careful negotiation over decades by government edict. They published their plans with statements from Messrs Gove, Sharma and Jack, from a Scottish businessman and from the Scottish Retail Consortium, but with no word from the Welsh Secretary of State and no involvement of devolved Governments. They sweep state aid to themselves and give a role to the CMA, which is unrepresentative of the devolved nations.

The Bill grants UK Ministers powers on mutual recognition without any input from the devolved Administrations. So if England, for example, imports chlorine-washed chicken, consumers in Aberdeen and Aberystwyth could find it on their supermarket shelves without any say by their elected Governments. Similarly, the Bill’s lack of a public health exclusion from market access principles makes it difficult for all parts of the UK to implement policies to reduce harms from alcohol and tobacco, for example, or to tackle environmental harms.

Meanwhile, this House’s Delegated Powers Committee describes the Bill as a constitutional power grab, apparently horrified by its “extraordinary, unprecedented powers”, which allow Ministers to amend or repeal parts of this Bill—or indeed any Act of Parliament or statutory instrument.

We do not concur with the Government’s assertion that

“the Bill ... is not constitutional but economic”.

Rather, we agree with the Archbishops that

“the effect on devolved policymaking is of constitutional significance”.

The Delegated Powers Committee calls on us to ensure that major decisions are taken by primary, not secondary legislation, noting that much of the Bill’s reliance on statutory instruments has no relation to any need for urgency.

I turn to the CMA. Its present structure is inadequate, not simply by failing to represent all four nations, but by lacking a clear duty to place consumers at the heart of its work. It is notable that nowhere in the Minister’s letter to your Lordships of 1 October does the word “consumer” even appear. You have to get to Clause 32 before you find a welcome mention of

“impacts on prices, the quality of goods and services or choice for consumers”.

Competition is not an end in itself; it is to serve consumers, prevent rip-offs and promote fair trading and growth. Intervention exists to get a market working for consumers, so that objective must be hard-wired into the CMA’s DNA. The noble Lord, Lord Tyrie, as chair, produced an excellent suite of suggestions to make the CMA consumer-focused and fleet of foot. We will seek to write these into the Bill, as well as to reflect all four nations.

In this Bill, the Prime Minister has managed to anger lawyers, devolved authorities, the EU, the churches, his own Back Benches and the majority of your Lordships. He is really like a bar-room brawler, taking on all comers. Is it possible that they are right and he is wrong? Perhaps it is worth reminding Mr Johnson on the oft-quoted words that Barack Obama left in the Oval Office for President Trump:

“We are just temporary occupants of this office. That makes us guardians of those democratic instructions and traditions—like rule of law ... it’s up to us to leave those instruments of our democracy at least as strong as we found them”.


Something is needed to replace the EU’s competition-based open market, such that consumers do not lose out, so that public health, the environment and food standards are protected and that the union is strengthened, but it is not this Bill. This must be amended to be workable, legal, democratic and respectful of the devolution settlements. For that reason, we share the regret expressed in the amendments of the noble and learned Lord, Lord Judge, and the noble Lord, Lord Cormack, that the Bill undermines the rule of law and reneges on a treaty, reducing our standing on the world stage. That is regrettable indeed, and completely avoidable.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

Moved by

[Baroness Hayter of Kentish Town]

1: Clause 1, page 1, line 6, after the first “Kingdom” insert “to protect and promote the interest of consumers and safeguard the environment”

[Baroness Hayter of Kentish Town (Lab)]

My Lords, in moving Amendment 1, I welcome that today we are not starting on Part 5 of the Bill, as there are two other major issues which need to be reformed. Indeed, the Bill’s genesis never involved including Part 5, but concerned how to use repatriated competitive and other regulatory powers post transition. Today we will deal with two of these: first, how to give the new competition regime a consumer focus; and secondly, how to organise returning powers into the devolved structure the UK will operate in 2021, as opposed to the 1973 position when we entered the EU.

Amendment 1 deals with the whole point of market intervention and competition policy: to promote the interest of consumers where, for whatever reason, they are operating in an imperfect market. But it also acknowledges that helping businesses to grow or consumers to benefit must not be at the expense of our precious environment. The amendment would write into Part 1 that its purpose is to benefit consumers and to safeguard the environment.

Anyone who has worked in regulation or in the courts knows that these overarching objectives, or duties, are essential in interpreting or enforcing the specific clauses, resulting legislation or indeed future legal cases arising from the Act. The overarching purpose is usually taken into account. Before he left the CMA, the noble Lord, Lord Tyrie, as its chair, called on government to strengthen the CMA’s consumer duty, writing that the internal market will work for consumers only if it is

“fair, competitive and adequately, proportionally and properly regulated.”

Amendment 1 would ensure that legislation on how the internal market is governed has this objective hardwired, or mainstreamed, into its overarching purpose.

A clear example of why this is so necessary is the Agriculture Bill. The Government refused to accept a UK-wide commitment to retaining food standards. I gather that Prue Leith has resigned from the Conservative Party in reaction to that rejection. More importantly for this Bill, just because the UK Government do not want to guarantee high food standards for consumers does not mean that the other countries of the UK do not.

As we roll out a new internal market for the UK, it is essential that an overarching objective of the legislation—the interest and well-being of consumers—be written into the Bill. Given the role of the CMA with regard to this Bill, it is similarly important that it has the duty to the consumer at the forefront of its work. As the noble Lord, Lord Tyrie, said, for the internal market to work for consumers, the CMA must be fit for this task:

“Until Brexit, much of the competition work lay with the Commission. If we are to ensure our companies play fair, do not profit at the expense of ripped off customers, are overseen ... by a competent authority, we need ... changes to the ... composition and duties of the CMA”,


which

“needs new duties to act quickly and with the consumer interest paramount and powers to make this possible”.

The amendments in this group are part of the effort to achieve these aims. Amendment 1 adds the duty to the purpose of the Bill, and Amendment 112, also in my name, adds it to the CMA’s objectives.

The group addresses two other issues: what is known in EU-speak as proportionality, and procurement. Amendment 2 in the names of my noble friend Lord Stevenson, the noble Lord, Lord Anderson, and the noble Baronesses, Lady Bowles and Lady McIntosh, would write the principle of proportionality into law to make sure that the Government, in exercising their powers under the Bill, do not go further than is necessary to effect mutual recognition and non-discrimination; and, vitally, that they respect the principle of subsidiarity whereby matters are agreed at the most local level possible. This would make sure the Government act only when their objectives cannot be achieved by the devolved authorities and would be better done at UK level.

The Government recognise and use this principle of proportionality. Indeed, just last week they tabled an amendment to the Medicines and Medical Devices Bill—which I believe is in Grand Committee even as we speak—stating that disclosure of information relating to medicines covered by international agreements may take place only where it

“is proportionate to what is sought to be achieved by it.”

That same principle needs to be hardwired into this Bill to make sure the powers are not used—for convenience or whatever—by the UK Government when they could be used better by the devolved authorities.

As the Minister will know, having been around the EU for some time, subsidiarity was not always in the EU mandate but, once introduced, influenced all decision-makers’ thinking, making them think twice before taking powers to themselves at too global a level. For those reading this in Hansard, the Minister at this point has a very disbelieving look on his face.

Finally, Amendment 59 in the name of my noble friend Lord Stevenson aims to retain public procurement as a devolved matter, thus exempt from market access principles. This is not to say that public procurement should not adhere to recognised principles, but to ensure that these are covered in the existing work on common frameworks in a public procurement framework. Since 1998, public procurement has been devolved, and our leaving the EU is no reason to alter this or for it suddenly to become a reserved matter, especially when a framework is already being developed. The Government have given no rationale for trying to make it reserved. In the White Paper, they said, without any reasoning:

“For goods, non-discrimination will apply within certain excluded areas such as procurement.”


They said they were considering—only considering—whether and to what extent non-discrimination should apply to public procurement. Perhaps the Minister could provide an update on their thinking. Perhaps he could also explain why Whitehall thinks it can deal with procurement any better than the devolved authorities, particularly given the recent example of UK-wide public procurement under Covid.

There are real concerns about simply handing public procurement to the Government, given that the WTO’s general procurement agreement, which would replace the UK’s 2015 regulations, would not include socially responsible public procurement provisions unless they were nailed down in advance. Amendment 59, therefore, aims to prevent the loss of these safeguards and keep public procurement devolved so that price-quality ratio, rather than simply price, is included in tender evaluation criteria and can be maintained by the devolved authorities along with the normal requirements of value for money et cetera. We want a UK-wide internal market to work for consumers and business, to safeguard standards, maintain the environment and ensure that competition does not fuel a race to the bottom. That would be good for neither workers nor consumers, nor indeed for businesses. These modest amendments would help to achieve that objective. I beg to move.

--- Later in debate ---

[Lord Callanan (Con)]

Well, as I have said before to the noble Lord, we remain completely committed to the framework process and we remain committed to frameworks that have already been agreed—but we see this legislation as complementary to that, as it underpins the entire framework process. As I said to him with regard to the deposit return scheme, if it comes into force when it is predicted to do so, then indeed it will be covered by the market access principles, but we are confident that the deposit return scheme can be brought into effect in full compliance with the market access principles.

[Baroness Hayter of Kentish Town (Lab)]

I am slightly lost on that, but we will come back to it. I thank the Minister for his response and I am grateful for the very interesting debate that has happened. I will say a few words about what was said by the noble Baronesses, Lady Noakes and Lady Bowles, about the point of competition and why it should be here. I agree with the noble Lord, Lord Naseby, that competition is extremely good for consumers. We want to see a successful economy, and I see no difference whatever in what he was spelling out and what we want to achieve.

The problem, of course, is where, for whatever reason, there is not a perfect market. Although here we are talking about goods rather than financial services, I was involved in the Financial Services Consumer Panel, and even though we had and still have—although Covid is throwing everything out—a thriving financial services market that has been good for the economy, for consumers and for the taxpayer, it has sometimes been, as we know from all the compensation that had to be paid, at the expense of consumers. So we cannot assume, simply because we have a good, thriving economy and lots of competition, that there are not sometimes disadvantages for consumers. That is why it is important, while we want a competitive, thriving market, to make sure that those protections are there. So as we look forward to the internal market being all the things that have been described, it cannot be at the price of consumers.

As I have said, I really support competition—we all used to wear NHS glasses until someone freed up the market, so we are all able to get nice red ones now. I doubt there is anything much between us on that. It is important, though, as we look forward to a market that is going to work for the whole UK, that it is not at the expense of consumers or the environment. I have been buying plants recently, hoping that one day we will have some good weather, but they should not be in peat pots. That is not good for the environment. Something may be good for consumers and at a good price, but you also need to consider the environmental aspect.

Consumers are not just interested in price; they are interested in safety and the longevity of products. However, that is not always something they can see at the point of purchase. Price is very easy for consumers: they can look at it and compare. Other things behind the price are also important. It is important as we look to a new market mechanism that we take that into account. I am sorry to have gone on a bit about this issue but as we will come back to it on Report, it is probably helpful for the Minister to understand. We may not have got the wording quite right: I am not trying to trump the Government but to point out why those elements need to be included.

On the devolution issue, the noble Lord, Lord Empey, is right that there is a clash between the settlements and what we are now trying to do with the internal market; I think he called it a collision between London and the regions. I hear very much what the noble Lord, Lord Cormack, said: that if we get this wrong, we are threatening something much bigger than any of us thought. No Brexiteer wanted to challenge the union; that was not what divided some of us who had divisions on that issue.

We need to look at how we deal with devolution. I was really taken by the example that the noble Lord, Lord Inglewood, gave of the IGC process that led to the single market and other things. I will come on to that way of working when we consider a different group of amendments. The confidence to do things in a shared and consensual way is important. The noble and learned Lord, Lord Hope, said that it would probably be important to put in the Bill retention of the subsidiarity and proportionality principles. They have guided us well and there is no reason why we should lose them, just because we are leaving. I think we will return to that issue.

On procurement, I think the arguments were fairly common between us. I am afraid I was slightly thrown by what the Minister said and will have to read later exactly what he said about separate legislation. Maybe we can exchange correspondence on that issue, and on the timing. Clearly, we will need to come back to procurement to ensure that we have something that will work for all four nations. For the moment—and I am sorry about the length of my response—I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

--- Later in debate ---

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it is always somewhat intimidating to follow an introduction such as the one we have just heard from the noble and learned Lord, Lord Hope. I think I heard him correctly when he said at one point that he did not have a monopoly of wisdom. That was the only bit of his speech that I really disagreed with.

As we heard from the noble and learned Lord and from the noble Baroness, Lady Finlay, we need a mechanism to ensure that the common frameworks are at the start of the process before market access principles are applied. How exactly that can be finessed between the menu of options we have in front of us, with these and other amendments today, can be a question for discussion—as indeed the noble and learned Lord, Lord Hope, indicated. But, essentially, the role of the common frameworks undoubtedly needs a statutory basis. The consensual mode of working that we have seen via the common frameworks surely has to take priority over other modes of rule setting, and a failure-to-agree process—which must be exhausted before other action is taken—needs to be in the Bill, as it is in the common frameworks mechanism.

Like other Members of your Lordships’ House, I was involved in the work of the European Parliament. I was a party functionary rather than an elected Member. Through that I witnessed the discussions, arguments, concessions, joint working, co-determination, consultation, redrafting and mutual respect that went into the emergence of EU regulations. There was no simple imposition by one all-powerful body. Negotiation and agreement were needed between the European Council, the Commission and the European Parliament for action to be taken. As the noble Lord, Lord Inglewood, mentioned, some really big decisions were referred to the IGC—the Intergovernmental Conference. It was a way of working that produced outcomes to which everyone could sign up. Now, consensus building might have taken time; there was the odd time when clocks were stopped at midnight, which we may have to do again today, but the position reached each time meant that all the parties involved could live with the resulting decision.

My view—and I think the view of all of us—is that the internal market process ought to be replicating, albeit on a smaller and much easier scale, those sorts of international and intranational methods that allow for joint working and consensus building as the prime route for decision-making. Of course, some issues will prove not to be amenable to consensus—this too was mentioned earlier—in which case there has to be an agreed adjudication and decision-making mechanism in place, but with the common frameworks procedures exhausted before any of that has to be set in train.

I turn to Clause 51, which has just been mentioned by the noble Baroness, Lady Finlay. This is understandably of major concern to the devolved legislatures and their Governments. In three quite simple, short subsections it amends the Scotland Act 1988, the Government of Wales Act 2006 and the Northern Ireland Act 1998—and all without a word of warning, far less the agreement of any of those elected authorities whose established settlements it undermines. Few of us expected to read a clause like that, dropped into a Bill on a quite different subject, which would blatantly amend these long-developed settlements.

We heard from the noble Lord, Lord Dunlop, in the previous group and we will hear from him shortly in this group. I hope he will not mind if I quote from what he said at Second Reading. He said:

“Devolution is now integral to the UK’s constitutional arrangements. At a time … when it has never been more important for central and devolved Governments to work together … to risk destabilising those arrangements seems careless, to say the least.”


He went on to ask whether

“we want our country’s future to be all about endless intergovernmental competition and conflict or about co-operation and confidence”.

His preference, of course, was for

“a modern, thriving, forward-thinking and inclusive UK union … to look and feel like a joint endeavour”.—[Official Report, 19/10/20; col. 1336.]

That is what this group of amendments is seeking to achieve, but it is not where the Government are going at present. They seem to be thinking of asking us to pass this Bill without legislative consent from the very authorities whose powers are being diminished. I cannot believe that the Minister wants such an outcome, but how seriously does he take this? Is he really happy to completely override the Sewel convention, set aside the success of the common frameworks process and challenge the devolution settlements that have served us so well for so long?

[Baroness Humphreys (LD) [V]]

My Lords, I will speak to the amendment to Clause 51 in the name of the noble Baroness, Lady Finlay of Llandaff, to which I have added my name. The amendment opposes this clause standing part of the Bill. In a Bill that stands accused of breaching international law and impacting on devolution settlements, this clause is probably one of the most harmful, in the power that it hands to Ministers, and through them the Executive, to make regulations.

As the Explanatory Memorandum explains, regulations made by Ministers under these powers are to be made by statutory instrument and may be used to amend, repeal or modify the effect of legislation, including Acts of Parliament, which of course include the Government of Wales Act 2006—and, as the noble Baroness, Lady Hayter, has just pointed out, all without consultation with the devolved Administrations.

However, the prime function of this clause, and the whole of Part 7, is to ensure that all clauses of this Bill become protected enactments. It neuters the powers of the devolved legislatures, ensuring that they are unable to put forward Acts in their own Parliaments, in their own areas of devolved competence, to modify this Bill if or when it becomes an Act. This is almost unprecedented. The noble Baroness, Lady Finlay, has already told us that, since devolution, the only other examples of protected enactments covering all sections of an Act are the Human Rights Act and the Civil Contingencies Act.

Even in the case of the withdrawal agreement Bill, which was initially intended as a protected enactment, the UK Government produced a clause-by-clause analysis justifying protected enactment status, which eventually resulted in only a few clauses being protected. Why is this approach not applicable to this Bill? The Welsh Government have asked for a clause-by-clause discussion of why each clause should be protected. I would be grateful if the Minister could outline the Government’s response to this request.

Up to now, the Government have not produced any detailed justification of why protected enactment status is necessary, which exemplifies their cavalier attitude to devolution in general. In Wales this is seen as an assault on our devolution settlement, heralding the return of direct rule from England.

We are faced here with another example, as with the Covid-19 response in England, of Whitehall insisting on managing from the centre rather than understanding and empowering local decision-making. The powers of our devolved legislatures and regional mayors, although limited, seem to be resented and distrusted by the Government, and the automatic response seems to be to claw back control to the centre. My fear is that this Government’s unthinking, knee-jerk reactions all add to the perception that the union is not working for the devolved nations and, as I have said in previous contributions, this is encouraging an increasing percentage of people in Wales to conclude that the future lies in independence.

My colleagues and I on these Liberal Democrat Benches want to see true devolution of power to all four nations, including England, in a federal UK where each nation is equal to the other and treated with equal respect. For our party, the union is important because, as federalists we know, that without a union, federalism cannot exist, but we also know, that without federalism, this union will not exist into the future.

Clause 51 is truly indicative of the UK Government’s attitude towards the devolved parliaments and their powers and the desperate need they seem to have to curtail those powers by a show of strength. It is vital to the devolved nations that this clause does not stand part of this Bill, and if the noble Baroness is minded to reintroduce a similar amendment on Report, she will again have my support.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Lords Chamber

Moved by

[Baroness Hayter of Kentish Town]

7: Clause 2, page 2, line 4, leave out “or imported into”

[Baroness Hayter of Kentish Town (Lab)]

My Lords, my purpose in moving Amendment 7, which would exclude imported goods, is to emphasise, in rather stark terms perhaps, that the Bill goes considerably further than simply saying that goods made in one part of the UK must be able to be sold in any other part.

As written, it allows any good that one part chooses to import to be sold throughout the UK, with absolutely no say by the Governments or legislatures of the other three countries. So, if Northern Ireland, for any reason, permitted chlorinated chicken to be imported—although I am absolutely confident that it would not—those delightful carcases would automatically have the right to be sold elsewhere in the UK. Similarly, if Scotland accepted a very high salt content in crisps or we in Wales had too much sugar in our chocolate, or anything else like that, we would be able to import those things in any one country and they would automatically have the right to be sold elsewhere.

It could be something that we do not want for all sorts of reasons. For example, England might import something that perhaps does not damage particular producers, consumers or the environment within England but could affect farming, consumers or households elsewhere. With agriculture, we would well understand the problem with sheep farming—hill sheep farming in Wales being more affected. Certain things imported into England could have a more devastating effect somewhere else; nevertheless, once imported into one country, there would be an automatic right for a good to be sold across the kingdom.

When we were in the EU, of course, we had similar rules on what are called “goods on the market”, whereby goods guaranteed as safe, desirable or acceptable in one country could appear in the other 27 markets. However, the difference is that the EU has a system of mutual recognition of checks, standards, assurance and monitoring, as well as the safety alert system, which applies to all member states, so that each nation has confidence that, when something is imported and on the market in one country, it is equally acceptable in any of the other member countries.

It is not that we distrust any of the fellow Governments in the UK—even Mr Johnson’s—but the worry is the denial of the involvement of the other three nations in decisions on what to import by the fourth. Of course, that then impacts on what can be sold on that market, and that is the problem—the lack of that involvement. The noble Lord will understand that this is more of a probing amendment but I think that it needs justifying and some explanation of the risks in relation to imported goods.

Amendment 8, in the name of my noble friend Lord Rooker, who is of course something of an expert on the subject, is more targeted and would exclude food or animal feeding stuffs from the mutual recognition principle. Obviously, I will let him make the case, rather more effectively than I ever could, for himself, but I should say to the Minister that my noble friend’s amendment is absolutely on the button with regard to consumer worries, so he will need some rather robust arguments for that amendment not to be considered on Report. I beg to move.

[Lord Rooker (Lab) [V]]

My Lords, at this stage of the Bill, Amendment 8, like Amendment 7, is a probing amendment, but I should just like to comment as an aside on the reference in the amendment to the definition of “food”. Most of our discussion on food safety centres on the Food Standards Act 1999 and the Food Standards Agency, but the bedrock of food safety in the country is the Food Safety Act 1990. Thirty years on, that Act, introduced by a Conservative Government, has really stood the test of time. The change made in 1999 was to separate policy for protecting consumers from the department at the time—MAFF, the producer department.

I do not want to disappoint my noble friend but I shall deal only with animal feed issues. I took the view that there will be plenty of opportunities to raise food issues—of course, I reserve the right to come back to those—but I want to deal with some animal feed issues. There is no lobby and no brief on this; I am simply using my own experience on some aspects and have made a modest internet search for some numbers. It is a multi-billion pound business, and it is crucial for human and animal safety that it is regulated effectively. There are some matters relating to animals—we are talking about food animals—which are all-island matters and which I am not at all clear about, and the Bill does not make them clear.

Animal disease control is currently an all-island matter on the island of Ireland. I say that for obvious reasons, but does that remain the case under the Bill? That is a point that really needs bringing home. If you looked at the other aspect, particularly in Schedule 1, you would think that we in the UK were isolated. We are not. Northern Ireland is on the island of Ireland, and there are some issues—I will give some other examples—where all-island matters take priority.

Animal feed is an area worth looking at because, to be honest, it is not considered to be as important as food, although of course it is. I recall that when I was at the Food Standards Agency—this was under the then chief executive, Tim Smith, who of course is currently distinguishedly chairing the agriculture trade commission and others—discussions with Thompsons in Belfast, the largest feed mill in Europe, centred on a scheme for controlling animal feed imports into the island of Ireland. This was industry-led and was to be through very few ports indeed. Today Thompsons operates an animal feed joint venture with R&H Hall in the Republic via Origin Enterprises to provide grain and non-grain ingredients to animal feed manufacturers and the flour milling industry across the island of Ireland. I want to know how that is affected by Clause 2.

To give a sense of the importance and scale of livestock, it is much more important to the economies of Northern Ireland and Ireland than it is to the rest of the UK. I will give just one example. If we compare human populations with those of the four-legged food production animals, cattle, sheep and pigs—I have excluded horses, which people can get uncertain about; we slaughter horses for feed but we export them—in the UK the ratio is approximately 0.7 of an animal per person, but in Ireland it is 2.6 animals per person and in Northern Ireland the figure may even be 2.7. So one can see that livestock is much more important to the economies of the island of Ireland than it is to the rest of the UK.

Animal genetics are just as important on an all-island basis. For example, Elite Sires has been Ireland’s leading provider of high-quality pig semen for 30 years. It is the sole provider of DanBred cutting-edge swine genetics on the island of Ireland, based of course on Denmark’s remarkable success in pig production. It delivers what it says—because I could not argue between one sample of swine semen and another—is the best swine semen in the land all over Ireland at the time when the animals are ready. How is that affected by Clause 2?

I mentioned that the safety of feed is important. The Food Standards Agency and Food Standards Scotland are responsible for, and carry out, the function of official controls, to use the technical term, via local authorities. That is the case with most food safety issues as well. However, local authorities, particularly in England, have not in the main taken feed issues as seriously as food. The Food Standards Agency, being aware of that—I am speaking now specifically about England—has taken many steps to try to improve the situation, but the picture in its latest assessment is not a good one. I will give some short quotes from the executive summary of the latest audit for England of the way that local authorities look at animal feed, published as long ago as October 2016. Local authority service plans

“had not adequately taken into account the Agency’s National Enforcement Priorities … There had been only limited implementation of the scheme for earned recognition.”

There was “little evidence” that local authorities

“had reviewed the impact of earned recognition on the delivery of official controls”.

Local authorities were

“using an out of date version of the Association of Chief Trading Standards Officers … risk scoring system”.

Half the local authorities audited

“had incomplete feed registers and databases”,

which are absolutely fundamental to traceability. It said:

“Auditors were unable to assess the effectiveness of formal feed law enforcement actions as none had been carried out in the previous two years”.


Lastly, none of the English local authorities audited had

“any specific documented procedures for assessing the accuracy of official feed reports to the Agency”.

I have to say that if the Government want to check on this situation and there has been no significant improvement in the last few years, that function should probably be removed from English local authorities because they are not up to the job. It is fundamental to human and animal safety.

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[Lord Callanan (Con)]

No, it does not mean that the requirement is to be treated as though it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effect.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I think I am Baroness Hayter of Confused. I did not understand that last reply. I thank the Minister for attempting to answer the question, though I have to warn him that I think he is in trouble with the boss. I think he admitted that there would be checks at the border between Northern Ireland and Great Britain on pig semen. The boss said, “No checks, no extra paperwork”. I am now hearing noble Lords say, “New checks”. That is not what the Prime Minister said at that reception. He said, “If there’s a piece of paper, send it to me and I’ll throw it away”. I shall make no comment on semen causing particular problems, but it seems that there would be checks on it.

I shall try to be brief because a lot of points have been raised. I thank all noble Lords who have spoken, particularly those who support the line we are taking. I fear that many of these questions flag up the problem that the Bill was drafted without the full involvement and agreement of the devolved authorities. We may not be where we are if those discussions had taken place beforehand. I think it was the noble Lord, Lord German, who talked about parallel tracks between the common framework and this Bill. It loses not only the consensus approach to the common frameworks that we have discussed before, but the flexibility that the noble Lord, Lord Purvis, mentioned. We want to build on this. I hope the Minister will hear some of these questions and see whether he can give a response that ensures clarity for business, as well as for those operating in this area.

The Minister did not answer on universities and I am not sure he answered about the all-Ireland agreement. A lot of other points were raised about animal feedstuffs and pesticides. It would help if some of those dialogues could continue before we get to Report. It is also worth listening to what my noble friend Lord Liddle said. The Government should stand up and say that they support the maintenance of the devolved settlements, and that they recognise and want to keep diversity where it would still enable us to have an internal market. That sort of statement would be helpful.

I am sorry that the noble Baroness, Lady Noakes, is now not allowed to come back at me for what I am going to say. I partly agree with her. We want trade and believe that it is good, but not at any price—not at the price of safety or the environment. This does not mean that we are not in favour of greater trade with all the benefits that it has brought. I also agree with her that, of course, we favour free, and barrier-free, trade. That is why some of us want a deal with the EU, which has no tariffs or checks, and we wanted to stay as close to it as possible. I know it was not her view that we should stay in. I think I once heard her say—I am happy to correct this at the end if I am wrong—that trading on WTO terms would not be the end of the world. Good, the noble Baroness is nodding, so she confirms that she said it. That, of course, would mean a lot of checks and a stop to free trade.

The issues raised in this debate need further consideration. We have to resolve the question that the noble and learned Lord, Lord Hope, asked. Will there be any input by the devolved authorities into importation by, particularly, the English Government? They will need some comfort over that. I beg leave to withdraw the amendment.

Amendment 7 withdrawn.

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[Baroness Hayter of Kentish Town (Lab)]

My Lords, there is little to add to what my noble friend Lady Andrews and other members of the hard-working, thorough and thoughtful DPRRC have said, along with the noble Lord, Lord Fox, and others who have spoken in the debate. However, I would remind the noble Lord, Lord Thomas, whose party has been in government more recently than we have, that I do not recall any reluctance on the part of the coalition Government to reach for secondary powers when it suited them—but perhaps his memory is rather shorter than mine.

I should say to the Minister that these amendments are pretty much bound to be accepted by the House on Report. That, of course, will leave the Government having to try to defend in the House of Commons in more detail than they have had to thus far why they should gift themselves the most remarkable and far-reaching powers, none of which, as has been said, have they sought to justify by purpose, urgency or anything else. Rather than repeat what the 24th report sets out and what has just been set out so eloquently, I urge the Minister to listen to the wise words and, either after discussion or of his own accord, take these unnecessary and worrying powers out of the Bill.

My noble friend Lord Liddle touched on the powers in Part 5. Obviously we will take those out, but of course the Government might try to put them back in again. We should remember that this group of amendments covers regulations that would, if they manage to keep Part 5 in or return it, be made in some areas of Part 5. These regulations are really serious, due to the current Clause 47(2)(a), which, as everyone will know, gives the status of primary legislation for the purposes of the Human Rights Act to secondary legislation. Inexplicably and extraordinarily, those pieces of secondary legislation would therefore not be able to be struck down if they breached convention rights, rather they would have thrown around them the protective ring that is normally used only for primary legislation. But those measures are regulations that will not have been through the legislative process. They would be introduced as secondary legislation by regulation, but would suddenly be preserved as if having been given the status of primary legislation. That is set out in Clause 47(2)(a)—I hope I have got that right; I have my learned friend next to me, in case I have got it wrong.

Needless to say, the Joint Committee on Human Rights had rather a lot to say about this constitutionally unacceptable ruse. Its members have tabled an appropriate amendment to remove it when we get to Part 5, and quite right too. The Government seem to want to legislate by regulation—unchallengeable in court, therefore —giving it primary status that goes even further than the other Henry VIII powers which were considered by the DPRRC. I have a feeling that the committee met before the insertion of this clause in the Commons—I think I am getting a nod from behind me—which is presumably why the Delegated Powers Committee did not discuss it.

I add a further comment that goes beyond the Bill but is a reflection of what has already been mentioned. I have spoken in the House previously about the book, How Democracies Die, which lists institutional forbearance —along with the rule of law, respect for the opposition and a free press—as a fourth vital element of what the authors call quadrilles, which go beyond democratic elections, on how to have a robust and fully functioning democracy. Institutional forbearance is an interesting term and is defined in the book as,

“the action of restraining from exercising a legal right”,

thereby perhaps avoiding actions which, while within the law, violate its spirit. It is what my former supervisor, the noble Lord, Lord Hennessy, would call the “good chaps” theory of government. I agree that regulation-making powers can be donated to Ministers but the purpose of that was to enable small adjustments to the policy of an Act to be finalised or tweaked without primary legislation. It was not meant to gift big policy decisions—especially not of the sort included in the Bill, which I heard today was hurriedly written over the summer—to the Government with effectively no parliamentary scrutiny or agreement.

Therefore, like my noble friend Lady Andrews, and the noble Lord, Lord Fox—whose extremely useful quote from the noble and learned Lord, Lord Judge, I have not heard before—I am concerned about the extensive, unnecessary and quite unjustified use of Henry VIII powers, not simply in this Bill but in others. It is a worrying pattern that this House has a duty to curtail. I hope that this is the last occasion on which we have to remind Ministers that they should carry out the primary laws as passed by Parliament, not take to themselves powers to make their own laws.

[Lord Callanan (Con)]

My Lords, I have a sense of déjà vu about this debate. The noble Lord, Lord Liddle, will well remember our debates on the EU (Withdrawal) Bill. These amendments relate to delegated powers included in Parts 1, 2 and 5 of this Bill. I should probably decline the kind opportunity afforded to me by the noble Lord, Lord Thomas, to comment on the parentage of Henry VIII, apart from saying that the noble Baroness, Lady Bloomfield, who is an expert on all these matters, tells me that his parents were Henry VII and Elizabeth of York—officially, at least.

I should say in answer to the noble and learned Lord, Lord Hope of Craighead, and his comments on the Sewel convention that the Government are fully committed to that convention and its associated practices for seeking consent. These powers are purely there to ensure that the legislation works properly and is future proof. There is no intention whatever to use the powers to avoid Sewel processes.

I should like to take this chance to emphasise the importance of these powers for the ongoing dynamism of our internal market, and to emphasise that the Government will not take lightly their responsibility in administering these powers. I am of course listening carefully to what your Lordships say but it is important for me to explain how we intend to use these powers.

The Bill aims to ensure a smooth transition for businesses as they are no longer subject to EU constraints. However, we recognise that this is an ambitious new system and the Government want to make sure that it works as well as possible for businesses and for devolved Administrations. As the system embeds in the functioning of law and trade, we will of course be monitoring this. We will speak to stakeholders and devolved Administrations to ensure that it works as well as possible within our constitutional framework. Where it does not, the Government need to be able to make necessary amendments to the system for the benefit of all parts of the UK. In line with normal arrangements for secondary legislation covering devolved matters, we will of course engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.

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I do not think that we want to get there at this stage. We want to work constructively with the Government if they are willing to listen, and one area where they could work progressively is by recognising that in areas that would have an impact on devolved legislation, which ordinarily would be done through a Sewel Motion, the commitment to consult would be the bare minimum. Then we can have a discussion about the fact that, if there are significant impacts, seeking the consent of those Administrations will be important.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the noble Lord, Lord Cormack, always worries me when he starts talking about Henry VIII. As any woman knows, we gird our necks a little tighter if there is a threat that that is coming back.

In some ways, this is a continuation of the same debate, which is about why on earth the Government put together a Bill in such a hurry, as we heard earlier, and with so little consultation with—or even consideration of, let alone agreement with—the very devolved authorities whose competences it seeks to amend. It is partly that suspicion which has necessitated a rather sad amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern. To have to add the wording that the powers in the Bill must be used only for the purpose for which they were designed seems extraordinary. That would not normally be needed, if trust and mutual respect had been there in abundance.

Similarly, the amendments requiring consultation with the devolved authorities before introducing regulations or guidance affecting them should never be needed. If Government-to-Government relations were working properly, it would be de rigueur that that had taken place. Clearly, those relationships are not working properly, and that is why we need the amendments: to establish or obtain what the noble Baroness, Lady Bowles, called the proper conduct of devolution—or, as the noble and learned Lord, Lord Mackay, and others said, we have to get this right to protect the union.

I turn to the amendments in my name, Amendments 16, 41, 48, 63, 74 and 99. They make two particular points, one of which, as we have heard, is slightly at variance with those in the name of the noble Baroness, Lady Finlay. They are about whether any one part of the union should have a veto over something that may be of particular concern to the others, which is what the words “obtain consent” imply. Our words are “seek consent”, but make it an overriding obligation to do the necessary to try to reach full agreement. We also accept that there may be times when one party might hold up the process, at which point we will need some sort of dispute mechanism in place, which is something we ought to be discussing. As the noble Lords, Lord Cormack and Lord Naseby, said, maybe we should look at the two suggestions made today: my noble friend Lord Hain’s council of Ministers or, as the noble and learned Lord, Lord Hope, said, using the formula in the 2018 Act. But clearly we need to have thought about something like that before we get to Report, so we could add that.

But the principle, surely, is that the Government cannot simply start down the track of making regulations without first consulting. There was an issue about what consultation is—it is consultation before you even start the process. Handing over a finished draft instrument is not what I call consultation; you start at the beginning of the process. So they should not start down the track of making regulations without first consulting and then seeking to reach consensus with the devolved authorities. In a Bill about making a four-country internal market work, I would have thought that that was obvious—but history shows we need to nail it down. Surely, as I think the noble Baroness, Lady McIntosh of Pickering, said, we cannot believe that the Government would reject a requirement to seek agreement. It is motherhood and apple pie. For them to say, “No, we are not even going to seek agreement”, I think, would be an interesting response.

There is an issue about what all of this is about. Is my noble friend Lord Hain right to say that this, as we have heard, hastily written Bill is about trying to satisfy our US negotiating partners that they will have full access to the whole market and that the Government will not let anything get in the way of that? Or is it, as my noble friend Lord Liddle said, something perhaps in a way more serious, of trying to bring back control into the centre? I am not sure what the answer is to that. We will not go there tonight, but at some point, I think, we need to flesh out what is the purpose of some of this.

I turn briefly to my Amendments 41 and 48, the first of which would require the Government to consult with the devolveds before introducing legislation to amend the list of legitimate aims in Clause 8(6)—an issue touched on by the noble Baroness, Lady McIntosh. These are important—I know they sound a bit techy—because indirect discrimination is effectively excluded from the overarching principle if it can reasonably be considered as necessary to achieve a legitimate aim. So the definition, the list of legitimate aims, is clearly key. Quite rightly, the Bill lists the protection of the health of people in Clause 8(6) as a legitimate aim—amen to that.

The problem, as my noble friend Lord Hain has said, is that the list of legitimate aims can then be amended by regulation. Now, perhaps adding to the list might not constitute a problem, and Amendment 35 —not in this group but in a later one—in the name of my noble friend Lord Stevenson and others, would indeed add some more categories to the list of legitimate aims. But they would be on the face of the Bill, not stuck in by regulation, and that is surely the proper way of doing it. The problem, of course, is that while at the moment human health and, indeed, the health of animals or plants are there, they could be removed by secondary legislation from the list of legitimate aims. That would then extend the areas in which devolved Governments would not be able to set standards for products sold in their jurisdiction. This is real stuff.

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Moved by

[Baroness Hayter of Kentish Town]

68: Before Clause 16, insert the following new Clause—
“Purpose of Part 2
This Part promotes the continued functioning of the internal market for services in the United Kingdom for the benefit and protection of consumers.”

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I rise to move Amendment 68 but also to speak to Amendments 89, 96 and 102 in my name. I will take Amendments 68 and 96 together. As we discussed on Monday, these are to ensure that, as we go through this process of ensuring a working single market across the UK, we have consumers—in whose interest, after all, public policy needs to act—at the forefront of our minds.

Amendment 68 is particularly important. Noble Lords may recall that, at the start of Part 1, the very first clause outlines the “Purpose of Part 1”. I may have wanted to expand this a little, but at least a purpose is there. As we turn to Part 2, on “UK market access” as it applies to services, it simply says that it will govern the regulation of service providers in the UK, but no objective is set for why this is done.

If we look at the regulation of the financial services sector, for example, we see that clear objectives for their work are set down in the appropriate legislation. It would be good to have a similar set of aims here. My amendment, unsurprisingly, would set the purpose as promoting

“the continued functioning of the internal market for services in the United Kingdom for the benefit and protection of consumers.”

Other colleagues would add other things, and I am sure the noble Baroness, Lady Noakes, if she was in her place, would also prefer a different focus—although I hope that she would recognise that it should still have an eye on consumers. Surely, however, there has to be a purpose for this regulation.

As we have found with the legal profession under the Legal Services Act, for example, or with financial services under the various FiSMA Acts, intervention was needed because uninhibited competition in a market where consumers often cannot shop around or judge the long-term outcome of services—particularly financial services—necessitates some regulatory protections. If they buy a pension scheme, they cannot tell the long-term outcome, which means as a consumer they are very vulnerable. It is the same with legal services; you have no idea if your divorce settlement was good or bad until many years later. Very often there is an intervention for that purpose, but it is clear why the intervention is happening and what its purposes are. We need a similar thing here. Incidentally, given that such interventions often level the playing field, they have not been shown to restrict the growth of the relevant sector, so one does not need to fear that this will inhibit growth in any way.

Amendment 96 would add “the protection of consumers” to the list of legitimate aims whereby a service may be deemed not to be discriminatory. This might mean providing a service only in Welsh or in some other country specific way, but if it is aimed at protecting consumers, that would allow an opt-out, if you like, from it being discriminatory. 

Amendment 89 would remove from the consideration of whether a service provider is discriminating the words,

“it cannot reasonably be considered a necessary means of achieving a legitimate aim.”

I asked not my noble and learned friend here but another of our very learned colleagues how that sounded and whether this phrase was common in law, and at that point, he could not think of an example. It seems a vague definition for a service provider to have to work to. The whole paragraph is fraught with uncertainty as to who would judge that and how something could be reasonably considered necessary, for example, to protect public health, which is defined as a legitimate aim. However, it is a very indistinct definition for someone to decide whether it is discriminatory. Given that service providers sometimes have to act at speed, one has to ask: what sort of certainty would that provide? 

Even more confusingly, when looking at whether something could be reasonably considered as necessary —as if that was not hard enough—a further bit in Clause 20(9) says that has to be decided with regard to

“the effects … in all the circumstances, and”

Whether an alternative way of achieving a legitimate aim was available. We are getting into a lot of legal difficulties for a service provider to be able to judge whether they can tailor-make a service for particular needs if they have to go through quite so many indistinct legal loops. I beg to move.

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, the hour is late, and I will shorten what I was going to say. Amendment 78 is intended to achieve exactly the same objective, in respect of Part 2, as my Amendment 6 does in respect of goods. In other words, it seeks to incentivise both the Government and the devolved Administrations to commit fully to the common frameworks programme and rely on the market access principles only as a fallback when all else fails. The other two amendments in this group, Amendments 67 and 71, are consequential on it, since they would make the point at which the regulations came into force the point from which market access principles would apply. I cannot see why there is any difficulty with that.

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[Lord Callanan (Con)]

I do not think the noble and learned Lord is correct in his assumption, but it is a detailed legal point, so I will take further advice and reply to him in writing.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank noble Lords who have contributed to the debate, which poses more questions than even I had realised. I have also realised that I have not got a complete handle on the services that are covered. Are financial services excluded? I think auditing is excluded. It would perhaps be helpful if a note could be passed about what services are covered. I assumed they are cultural and intellectual property, education and architecture, but there are some interesting ones where there are big differences at the moment between countries.

I am particularly thinking of residential property, where Wales now licenses landlords and is ahead of us in licensing letting agents. We are now in discussion with the Government about the licensing—shortly, we hope—or authorisation of all property agents, but then that would be different between England and Wales and Northern Ireland and Scotland. Presumably all that would be caught by this, but I am not certain.

This is a genuine question and it would be really helpful to have, without it being part of the Bill and without it committing the Government to anything, a more useful note of what is covered. Then we could look at what is already different, particularly in licensing, as is certainly the case in the area that I know about of residential agencies in Wales and elsewhere.

In a sense, the bigger issue is the one I set out at the beginning. The noble Baroness, Lady Neville-Rolfe, put it much better. I was asking about the purpose of Part 2. I think the noble Baroness went further and asked whether we even need Part 2. It actually comes back to whether we need the whole Bill or whether the common frameworks road might be the better one, or, as the noble Baroness, Lady Finlay, asked, whether it might be sufficient to fall back on the 2018 position on what things could not be agreed—it would probably save an awful lot of this. The purpose of Part 2 needs justifying, rather than defining. Why do we need it? Is the noble Baroness, Lady Neville-Rolfe, correct that we do not need this level of detail?

If the Minister could also informally explain a little more about what would be covered, that would be helpful, and we might come back at a later stage to look at whether we could define why we have this part. However, for now, I beg leave to withdraw the amendment.

Amendment 68 withdrawn.

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The General Teaching Council for Scotland receives about 600 applications for registration each year from the rest of the UK, and in the past five years it has registered 2,246 teachers from the rest of the UK. There is movement between each of the nations, but those nations’ teachers are working to the qualifications needed and set by the education system in that country. I would like the Minister to explain whether teachers should be excluded from these provisions, or whether indeed it is proposed to try to bring everything down to the level of one or other of the nations of the UK.

[Baroness Hayter of Kentish Town (Lab)]

As the noble Baroness, Lady Bennett, makes clear, there is really no reason why the teaching profession should not be treated the same as legal services. If there is an answer, I look forward to the Minister supplying it. However, as I think the noble Lord, Lord German, said, it also raises the question of what else is covered, be it medical research, university teaching, religious teaching or driving instruction. It is the same question that I posed before: are these areas of education and the passing on of wisdom to be covered, or are they excluded? We might not have those answers now but we need to be very clear on what is covered in this part of the Bill.

[Baroness Scott of Bybrook (Con)]

My Lords, these amendments seek to exclude teaching services and the teaching profession from the scope of the mutual recognition principle in Parts 2 and 3 of the Bill. Starting with Amendment 79, the current list of entries in Schedule 2 is largely drawn from the exclusions under the existing framework in the retained EU law. Schedule 2 aims to list those services for which it would be inappropriate to apply either or both of the provisions in Part 2. For example, legal services are excluded in recognition of the long-standing differences between the legal systems in each part of the UK.

I should allay the noble Baroness’s concerns if I explain that public services, including the public education services, are already excluded from the scope of Part 2 of the Bill under Schedule 2. That exclusion will ensure that public education services are not subject to the principles of mutual recognition or non-discrimination in Part 2. For this reason, it is my view that Amendment 79 is unnecessary.

Clause 17 requires the Secretary of State to keep Schedule 2 under review and contains the power to amend it by regulation to add services or requirements to those matters excluded from the principles of mutual recognition and non-discrimination. I can assure noble Lords that the Government will continue to keep the list of exclusions under review to ensure that it includes the appropriate services and requirements, to which either or both market access principles should not apply.

I turn to Amendment 106, which deals with recognition of professional qualifications. I assure noble Lords that teaching standards across the UK are very important to this Government. The provisions in Clause 24 allow relevant authorities to replace the automatic recognition principle with an alternative recognition process if they think that automatic recognition of different UK teaching qualifications would not be appropriate.

We are therefore answering the General Teaching Council for Scotland and the issues brought up about Wales and Northern Ireland; they will still be able to set standards in those devolved authorities, as now, and control who can teach in them. If the General Teaching Council for Scotland or a council in any other devolved authority decides that recognising teaching qualifications from other parts of the UK automatically is not appropriate, it can put in place an alternative recognition process to check qualifications and experience, as set out in the Bill. That should allay a number of the fears brought up in this short debate.

The system will enable relevant authorities to assess an individual’s qualifications before allowing professionals to practise. Relevant authorities will continue to have the ability to refuse access to those who are unable to demonstrate that they meet the standard requirements, such as the Welsh language. This makes an exception for the teaching profession unnecessary. On those grounds, I cannot accept the amendment and hope that the noble Baroness will withdraw it.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

[Lord Naseby (Con)]

My Lords, when I first read through the Bill, I had some reservations about the CMA, not least because of the number of its investigations that have not exactly gone smoothly, as my noble friend Lady Noakes referred to. As all noble Lords are aware, it arose from its antecedent, the old Monopolies and Mergers Commission. I voiced some of those reservations at Second Reading. I then had another look at the OIM and could not for the life of me understand why it did not have its own status. How could it be right for it to be almost subservient to the CMA? I could immediately see a clash of interests. As has just been said, its role is to monitor, advise and report. That may well clash with the basic element of the CMA. While this amendment may not be exactly right, there is a strong case for it.

I will give an example. I have recently been approached by some outside people because they know that I take an interest in the credit lending market, principally credit unions. It is a difficult market because there is the FCA, which does a good job on the whole, but there is also the ombudsman. People who are in difficulty with credit are prone to appeal to the ombudsman for better treatment, as it goes beyond the normal provisions under which the FCA works. That created a real problem for the genuine lenders—not the fly-by-night operators—because of a clash of interests.

I would not expect my noble friend on the Front Bench to respond in any detail today, but the OIM has to have its own status. It should not be in a position where it is embarrassed by the CMA going against what the OIM thinks is appropriate in any situation.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the noble Baroness, Lady Bowles, referred to a letter to the noble Lord, Lord Purvis, following an earlier discussion. I have not received a copy of that. Could all the letters sent following these debates be circulated to all Members of the Committee?

[Lord Purvis of Tweed (LD)]

The noble Lord, Lord Stevenson, had it.

[Baroness Hayter of Kentish Town (Lab)]

I think all speakers in these debates ought to get them. Unless, of course, it is a very private letter to the noble Lord, Lord Purvis—in which case we will leave that between the two of them—all noble Lords should see all the letters that arise from these debates.

When I started thinking about this group, I thought that there were two divergent views, but they are not as divergent as I thought. It looked as if some amendments wanted the OIM, which is an observatory rather than an office, to be almost part of BEIS, with little independence. Our view is to the contrary. Amendment 113 in my name, which is obviously probing, signals that the CMA should not be advising the department but using its powers to intervene as necessary. That did not mean that it should not send messages to the Secretary of State, as the noble Lord, Lord Tyrie, did when, as its chair, he sought more powers for the CMA to intervene. He wanted a proper consumer duty adding to it. The amendment does not say that it should not advise the department but makes the point that it should not be subservient to it.

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On a whole series of grounds—the cost and efficiency of the OIM, with £5 million and 55 staff working on hypothetical benefits; the lack of clarity as to the OIM’s role when operating in the devolved Administrations; the concern that the OIM will have a view of making a judgment on a devolved Administration’s different approach; and a lack of incentive—I hope that the Government will listen to our arguments about these amendments. If this is to progress, these amendments really need to be in this legislation.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I rather regret that, early on in this debate, the noble Baroness, Lady Randerson, mentioned rugby. I would have thought that this was not the weekend for her to do it, but I am sure that it cheered up others in the House.

It is hard to add much to the case so clearly set out by earlier speakers, and I thank the noble Baroness, Lady Bennett, for covering the amendments in our names, so I do not need to go through them. I will just say that, yet again, the Bill bears testimony to the haste in which it was cobbled together. Perhaps even more serious was the lack of consultation and joint working with the devolved Administrations. How else was it possible to think it appropriate to give the OIM to a non-ministerial government department, accountable only to the UK Parliament through its sponsor department, BEIS, without a thought to the interests, the responsibility, the competences or the rights of the devolved authorities?

As the noble and learned Lord, Lord Thomas of Cwmgiedd, said, whatever structure we end up with must surely have the confidence of all four nations. Indeed, he said that the appointees should have the experience and the expertise of the four constituent nations. That point was emphasised by the noble Lord, Lord Empey, who said that, particularly in the case of Northern Ireland, which will be working in a different regime from the others, it was absolutely essential to build in the requirement that someone with that expertise and knowledge was involved in the governance of this organisation.

Without these amendments, it would simply be the Secretary of State who had the power to appoint the chair and members of the CMA’s board and of its panel—the latter, of course, as we have heard, is responsible for operational and casework decisions. More than that, BEIS is a UK department, which gives the CMA a non-binding strategic “steer”, as the noble Baroness, Lady Randerson, reminded us. Therefore, one Government of the four gives the CMA a steer with that Government’s strategic priorities, to which it is expected to have regard. Placing the OIM in the CMA to monitor the health of the internal market—apart from all the issues about whether it has any expertise to do so—including its impact on intra-UK trade, investment and competition, but with no voice from the other three parts of the UK, appears, at its kindest, forgetful, but at worst, deliberate.

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[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

The noble Lord, Lord Judd, has withdrawn, so I now call the noble Baroness, Lady Hayter of Kentish Town.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, we have said it before, so I will repeat only briefly: these amendments would never have been needed had the legislation been drafted in consultation and agreement with the devolved authorities. Instead, the legislation, as we have heard, reads like a complete desire to run everything from the centre, as if devolution never happened, and that the UK Government would simply decide and tell the others what they are to do. For example, as we have heard, it gives the CMA a cross-UK role with regard to the internal market but leaves the CMA, which currently has no devolved accountability, with the power to set penalties above the IM without any devolved authority consent.

I keep asking the same question: do the Government just forget about the other three Governments? As I have already said to the Minister tonight, we need the Government to respond to the thrust of these amendments positively and make it clear that they respect and want a proper role for the devolved authorities. The noble Baroness, Lady Randerson, said that little things matter. These are quite little requests, but they certainly matter.

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Moved by

[Baroness Hayter of Kentish Town]

136: Clause 31, page 23, line 19, after “operation” insert “for the benefit of consumers”

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I shall speak also to the other amendments in this group that are tabled in my name. I would have thought that it is clear by now, in particular to those noble Lords who have sat through all three days of our debates in Committee, that I think it is really important that, as we look at how the internal market is working, we need to include consideration of how it impacts on consumers.

For example, the first of these amendments would ensure that where the CMA reviews the effective operation of the market, it would measure how well it was serving consumers. Similarly, in Amendment 139, its annual report should include the impact of the internal market on consumers. In Amendment 142 it should look at the prices, quality of goods and services, and choice for consumers, in addition to the volume of trade between the four parts of the union.

We do not want trade to go rocketing up if it simply means monopolies are growing and choice diminishing, nor simply a rush of goods of shoddy quality, or services that offer no standards and no redress. These amendments do not mean the consumer impact trumps everything else, but that it must be considered in the mix in any report so that decision-makers have the full picture at all times.

Incidentally, the wording in Amendment 142 is a straight lift from Clause 32(4)(c), so it is not particularly innovative, nor surprising to the drafters. It is just saying that if you look at how the internal market is working it must not be just by volumes of trade; it must take into account the various aspects of how a consumer would measure whether the market was serving their needs. I beg to move.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I do not need to say a lot in this group because I have already made it clear that I consider transparency an important part of consumer protection and the way to find out whether consumer interests have been looked after. My Amendment 138 to Clause 31 relates to the provision where any person may request a report, which the CMA can then choose to undertake. My amendment would take away the optionality of publishing the report and says that it must be published.

The Minister said in connection with Administrations that such transparency may prevent forthright exchanges. In this location, it is not advice about regulation that comes under other clauses. This is a general case and if it is reporting—for example, opining on what is or is not a subsidy, discrimination or any of the other matters on which it could be consulted—then the opinions form a body of information that should be publicly available. I would concede safeguards, but they are there anyway in Clause 36 about reports under Part 4. However, I think that the wording should reflect the presumption of publication.

The noble Baroness, Lady Hayter, has also tabled amendments about consumer protection. While I have been a bit picky at times or uncertain whether it is the right thing to qualify the internal market with reference to any sector, what she said about consumer protection having to be in the mix is right. Certainly, Amendments 139, 140 and 142 are in the right places to establish that point.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I start by trying to reassure the noble Baroness, Lady Hayter, that we do not wish to see monopolies increasing and choice and quality declining either.

Amendments 136, 139, 140 and 142 aim to give the monitoring and reporting obligations of the office for the internal market a specific focus on the interests of consumers. Clause 31 enables the office for the internal market within the Competition and Markets Authority to operate general and periodic reporting and monitoring to assess the effective operation of the UK internal market and Parts 1 and 3 of the Bill, including how it operates for consumers. These amendments would limit this function to assessing the operation of the market as it affects consumers.

The role of the office for the internal market is to monitor the health of the UK internal market, including specific regulations, sectors and nations. Moving to a narrower definition of the assessment criteria of Clause 31, from the outset, would hinder its effectiveness in fully delivering this function.

To appreciate this, it is worth setting out the breadth of the areas of monitoring that are in scope. They include emerging trends and developments in the UK internal market, cross-border competition, the nature and level of trade between different parts of the UK and access to goods, services and trade. Monitoring may be undertaken independently by the CMA or upon request by other parties such as the UK Government and the devolved Administrations. Proposals can be submitted to review specific sectors relating to the UK internal market.

In doing its work, the office for the internal market will naturally be able to gather information from consumers, businesses and public bodies. Clause 32(4) also specifies that its advice and reporting can involve consideration of the impact of new regulatory proposals on the pricing, quality and choice of goods and on services for consumers. The interests of consumers are therefore an important concern which is already laid out for the office for the internal market when undertaking its monitoring and reporting functions. So, I can assure your Lordships that it will take into account consumer interests in undertaking its wide monitoring and reporting functions and there is no need for a specific reference to this in Clause 31.

Amendment 138 aims to impose an additional requirement in Clause 31 that reporting on reviews which the CMA undertakes of its own initiative or following a request under subsection (1) on matters relevant to the effective working of the UK internal market must be published. Clause 31(4) already requires that all reports the Competition and Markets Authority produces on matters in subsection (1) be published. Clause 32(10), Clause 33(6)(b) and Clause 34(10) also require publication of the reports on the operation of the UK internal market referred to in those clauses as soon as reasonably practicable. In light of this reasoning, I trust that the noble Baroness, Lady Hayter, will be assured that the amendments are unnecessary and that the amendment moved should be withdrawn. We are already doing a lot of background thinking on consumer protections; it is not a closed issue.

[Baroness Hayter of Kentish Town (Lab)]

I thank the Minister for that reply and particularly for her last few words about ongoing consideration. If these debates feed into that consideration, we will not all have stayed up late for nothing.

I also thank the noble Baroness, Lady Bowles, for her support. I have not looked at the exact wording or at whether what the Minister said is right, but what the noble Baroness said about transparency is important. Because it is very difficult for individual consumers to take up these big questions, transparency is really important for their advocates—that is, consumer representatives—who are often very underrepresented on all these committees. Transparency is particularly important for those who, from the outside, are trying to ask questions about choice, redress, standards, quality and so on. I hope that those who are thinking about that issue will hear some of the arguments we have made. If they influence the sort of questions that are posed, we will put one little tick there, but the proof of the pudding will be in the eating. Will this be better for consumers when we have the market going? For the moment, I beg leave to withdraw the amendment.

Amendment 136 withdrawn.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th November 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, this debate is perhaps even more important than some of the others that we have had. The real advantage of a stand part debate is that one can question the purpose of a clause rather than getting down into the weeds of amendments.

The issue that the noble Baroness, Lady Bowles, has raised is fundamental to how we have been looking at this. She asked—these are actually my words, although the noble Baroness, Lady Neville-Rolfe, said much the same—whether the competition regime was appropriate for work on the internal market. I am sorry that the noble Lord, Lord Callanan, gave away in an earlier debate that this may have been written hastily over the summer; it certainly sounds like a cut-and-paste job, done without stopping to think. Just because it is the same organisation at the same address in Holborn, or wherever the CMA is these days, you cannot just cut and paste it; as the noble Lord, Lord Fox, was saying, it is about the culture of that organisation as well as whether the structure is available. There is a fundamental question here, which my noble friend Lord Stevenson dealt with under Amendment 115, of whether the OIM should be within this framework, as well as the even broader subject of whether these sorts of penalties are appropriate for such a different role.

There are some specific issues in these clauses, such as whether it is appropriate for the Government to be able to amend the list of exclusions without any involvement of the devolved authorities. We have discussed such matters before, but under this legislation the fixing of penalties could again be altered without any involvement of the devolved authorities. This is serious stuff. They are a part of the overall governance and working of the new internal market, yet the Bill is written as if this is simply a Westminster responsibility.

I come to what the noble Baroness, Lady Neville-Rolfe, was saying: exactly what is covered by these clauses? In an earlier debate I asked the Minister to set out what services were covered, but obviously I was mumbling at the time because he wrote me a very nice letter on 2 November telling me about the services that are excluded, which of course already exist in the Bill. The question that I was trying to ask is: what services will be covered? I still cannot get a handle on that. This is really important given what has been said about whether the demands and penalties applying to services that are covered are appropriate.

Obviously I was not very clear about what I wanted but I had talked about housing and whether someone organising a register of housing would count as a service. I was talking about landlords but the letter refers to social housing. We are talking not about social housing but about landlords of private housing. I am involved with another part of the Government, the Ministry of Housing, Communities and Local Government, in chairing something to try to set up a code for property agents for when the Government are ready to fulfil what they have already promised—that is, to set up a regulator of property agents. They are already a service but the circumstances are different—buying and selling a house in Scotland is very different from England; if you buy there, you tend to go to a solicitor rather than an estate agent—so there are different ways of a service being developed or in existence. Once they are regulated, perhaps property agents will count as a profession, which is a different issue, but before then, as a service, are they going to be covered by these sorts of requirements?

If that is the case—and this is the main thrust of what I want to say on this group— how will these services know that they are covered by this provision? It is important for anyone risking breaking the law, in the sense of civil law, and being charged a penalty to know that that law applies to them. If they do not define what they are doing as a service and therefore do not know that they are captured by this provision, they may find it difficult to understand that they could be required to provide information. I can imagine that this could really affect property agencies. They need to know that it covers them, which is quite an issue, but it is also unclear to me whether the level of penalties is appropriate for this area. For a small housing management group, for example, this daily rate of £15,000 will basically wipe out its business if it has an £80,000 annual turnover. We are talking about levels of penalty.

It seems to me that those agents are covered by this, but I am unclear about the appeals process. If they are asked a question, how do they know that it has legal force behind it? Even if they are told that—most of these people will of course not have lawyers —and there is a penalty, do they have any appeal? I could not find one in the Bill but I am sure the Minister will be able to tell me; it is quite unusual to have a penalty without any sort of appeal. I could not work this out but I am sure the Minister will.

My main ask is: can we know the sort of services that will be covered? Perhaps we could hear more—not in legal language but in language that I can understand—about how they would know and about their rights to appeal any fixed penalty.

[Lord Callanan (Con)]

I thank all noble Lords who have taken part in this debate. I apologise to the noble Baroness, Lady Hayter, if she found my letter disappointing; I will try to do better next time. The noble and learned Lord, Lord Falconer, looks disapproving; I am not going to write him any more letters if that is the case.

With regard to exclusions on services, all services subject to the authorisation requirements or the regulatory requirements are affected under the Bill unless they are specifically excluded from some or part of the rules under Part 2. I hope that that clarifies the noble Baroness’s question—if not, I will be happy to write her another letter. She is shaking her head in disbelief.

I say to the noble Baroness, Lady Bowles, with regard to her question on consultation, that we consulted on the general office, what enforcement provisions there should be and whether or not it should be included as part of an arm’s-length body. Once we had made the decision that it should be located within the CMA, there was of course extensive discussion between officials and the CMA on the powers and how they will be enforced. I say to my noble friend Lord Tyrie that I am of course aware of the proposals that he refers to on the CMA and I will be happy to take another look at them.

Addressing the specific questions on this clause stand part debate, I will set out the rationale for these clauses. Clause 38, as I believe we already discussed in the previous group, sets out the powers that the Competition and Markets Authority will have to gather information in support of its monitoring, advisory and reporting functions. As I said previously, in order to carry out its functions the OIM must have access to high-quality information to produce accurate, relevant and credible reports. Clause 38 will ensure that the CMA is able to require the assistance of third parties to perform its functions and is able to independently gather evidence in a timely manner.

I hope that the noble Baroness, Lady Bowles, agrees with me that presenting analysis based on partial or inaccurate information could be detrimental to the regulatory decisions taken as a result of OIM reporting and monitoring and would damage the reputation of the OIM among many key stakeholders in these fields. The powers in this clause are therefore put on a strong statutory footing. They will ensure that the reporting that the OIM undertakes will be as effective and comprehensive as possible for the benefit of policy-makers in the UK Government and the devolved Administrations, significantly strengthening existing stakeholders’ ability to navigate the new UK internal market.

Clause 39 describes what action the CMA is able to take in response to non-compliance with the information requests described in Clause 38. As noble Lords said, the CMA has existing powers under the Enterprise Act 2002 regarding non-compliance with its information requests. This is necessary to enable the CMA to carry out its functions effectively. As with Clause 38, the provision for the OIM in Clause 39 is modelled on those powers. The clause will allow the CMA to determine the most appropriate policy approach and the amount of any financial penalty to be imposed within the limits that have been prescribed. The clause also sets out the conditions where financial penalties may not be imposed because more than four weeks has expired since the CMA exercised its relevant functions.

Clause 40 sets the parameters that the CMA should consider for financial penalties in cases of non-compliance with an information-gathering request notice. Let me first say that I understand the concerns of noble Lords, but the preference and expectation will always be that information gathering is on a voluntary basis. The Government do not anticipate that the CMA will need regularly to fall back on the information-gathering and non-compliance powers. However, it is important to ensure that this facility is available to the CMA to detail how penalties will be set. As with other provisions, the Government have chosen to mirror the relevant provisions of the Enterprise Act 2002.

I can say to the noble Lord, Lord Tyrie, and my noble friend Lady Neville-Rolfe that the Secretary of State will make regulations specifying the maximum amounts in practice within the specified ceilings for these penalties in consultation with the CMA and other interested parties. I can confirm for the benefit of the noble Baroness, Lady Hayter, that the devolved Administrations will of course be consulted as part of this. In addition, and as noted in our debates on previous groups, I confirm to the noble Baroness, Lady Bowles, and the noble Lord, Lord Tyrie, that the CMA will not be able to issue a financial penalty against the UK Government or any devolved Government. Let me be very clear about that. Let me also assure the noble Baroness, Lady Bowles, that the Government are committed to not taking any steps to bring in the financial penalties until there is credible evidence that there is a need do so, so we will not commence these provisions without that credible need being demonstrated.

I will deal with a couple of other questions. The noble Baroness, Lady Bowles, asked about third-party requests. Such requests would be permissible if they were within the scope of Clause 31 and the CMA thought that they were appropriate. As I confirmed earlier, the White Paper invited consultation responses on how the functions to be delivered should be implemented as well as on whether an existing arm’s-length body should deliver them or bespoke arrangements should be established. As is obvious, we decided after that consultation that the OIM should be situated within the CMA.

With the reasons I have set out, I hope that I have been able to reassure noble Lords on their legitimate concerns and on why this clause should stand part of the Bill. I hope that the noble Baroness will feel able to withdraw her amendment.

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Moved by

[Baroness Hayter of Kentish Town]

153: After Clause 40, insert the following new Clause—
“Duty to consider the internal market when considering mergers
In section 58 of the Enterprise Act 2002 (specified considerations) after subsection (2E) insert—“(2F) The need to promote the better operation and improvement of the United Kingdom internal market is specified in this section, having regard to—(a) the need to promote research and development and innovation in new and existing industries and enterprises, and(b) the need to act in the interests of United Kingdom public policy.””

[Baroness Hayter of Kentish Town (Lab)]

My Lords, before I speak to the amendment, I will slightly cheekily ask something about the previous group. At the very end the Minister said that the Government would not commence the powers unless they felt they needed to, or some words like that. As he indicated, each bit of the Bill can be brought into force on different days, as the Secretary of State may by regulation decide. When the Minister responds could he say whether that would be by the affirmative procedure and whether the House would consider the commencement date at that point? He could have some assistance if he does not know. How such things are done is beyond my understanding. It would be quite interesting to debate at that point whether the powers should be taken. I am sorry to ask the Committee’s indulgence to deal with the previous group, but I am sure that everyone is very forgiving.

Amendment 153 seeks to insert into the CMA’s powers a clear and specific reference to the need, when regulating takeovers in the new and initially demanding internal market, to promote research and development and innovation in new and existing industries and enterprises, as well as the need to act in the interests of UK public policy. The latter point is key to attracting long-term investment, as the CMA needs enhanced tools to intervene against hostile takeovers.

There has been a catalogue of such hostile takeovers, such as of GKN by Melrose in 2018—surely a bleak day for British industry, with perhaps 6,000 jobs with the UK’s third-largest engineering company suddenly in the hands of new owners following a very narrow vote by shareholders in favour of the takeover of a 250-year old company. That vote was swung by hedge funds and arbitrageurs who owned 25% of the shares, which had been very recently acquired. Their short-term interest in making a quick profit came at the expense of the jobs, skills, research and development of this major industrial company, to the detriment of UK plc. Needless to say, the result has not been good. Not all takeovers are bad, but when Melrose’s own website describes its strategy as “Buy Improve Sell”, with its objective to achieve a significant increase in shareholder value often in as little as three to five years, one has to ask whether this is in the interests of UK plc.

Last year, Unilever, our third-biggest company by market value, only just escaped a hostile takeover bid from Kraft, which took over Cadbury in 2010. Unilever’s proposed move of its registered office to Rotterdam, which did not actually take place, would have meant that Dutch law, which provides a public interest defence for the company from predators, would have been available. Sadly, we do not have that in UK law. We must now strengthen our laws against hostile takeovers and takeovers generally that are not in the public interest, not just because it is the right thing to do but to encourage long-term UK and overseas inward investors that their investment is safe from short-termism.

Until recently, the law provided only three grounds on which the Business Secretary could refer a takeover to the CMA, which then decides whether it should be blocked. The first is media plurality, the second UK financial stability, and the third national security. The addition of a fourth—public health—earlier this year was most welcome, as it allows for, in its words:

“The need to maintain … the capability to combat, and to mitigate the effects, of public health emergencies”.


Ideally we should add a fifth—the need to foster and promote research and development and innovation in new and existing industries and enterprises—and a sixth: to act in the interests of UK public policy.

As the Business Secretary I think accepts, there remains a concern about foreign takeovers of British companies on the cheap. We need to ensure that, in considering relevant takeovers, the Business Secretary can refer a takeover bid, and the CMA should be able to consider whether the bid is in the interests of research and development or science and technology, or in the public interest generally. That would cover cases where the national interest should be considered, but where the definition happens not to fit neatly into one of the existing categories.

I acknowledge that any such new grounds for referral by the Business Secretary are outwith the Bill’s scope, but as the CMA now stands more alone in the world of competition regulators outside the EU family, we need to give it the tools, as it oversees the development of the internal market, to put the national interest and support for research and development clearly into its thinking and terms of reference. This will help UK plc to build back better after Covid, in the national interest. This is something the Bill allows us to do, adding a useful tool to what the CMA will do. I beg to move.

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[Lord Callanan (Con)]

It is forthcoming. Noble Lords will know that I cannot go further in terms of dates. It was flagged up in the Queen’s Speech and is forthcoming.

The grounds for ministerial intervention in mergers are deliberately precise and limited, in order to maximise transparency and predictability for businesses. The effect of the amendment would be to broaden the grounds upon which Ministers may make a public interest intervention in mergers. This would constitute a significant change to the UK’s approach to merger control which, as noble Lords observed, currently puts the emphasis on competition-based assessments by the Competition and Markets Authority, with narrow and specific grounds for ministerial intervention.

It is not clear how such a change would materially assist with the effective operation of the UK internal market which is, of course, the focus of this part of the Bill. The CMA already has significant powers and expertise to investigate the benefits and risks of mergers in relation to competition. An excessively broad power to intervene in the affairs of investors, shareholders and company boards risks stifling competition, innovation and creativity. This could lead to worse outcomes for both businesses and consumers, as well as stifling inward investment. For these reasons, I cannot accept the amendment and hope that the noble Baroness will withdraw it.

Before I sit down, I will answer the other question which the noble Baroness asked about the previous group. The power for the Secretary of State to specify the maximum penalties for breach of information-gathering notices will be brought in by negative SI. This mirrors Section 111(4) of the Enterprise Act 2002.

[Baroness Hayter of Kentish Town (Lab)]

The Minister is very polite. What he really wanted to say to me was: “Nice try”. There is a serious point here. As I said in my introduction, I know that the basic power is outwith the scope of this Bill, but there is some urgency to this question. The noble Baroness, Lady Ritchie, used the words “greater protections are needed against hostile takeovers”. They may not be exclusively from outwith the UK, but those are some of the ones where there have been particular problems. I think it is agreed that, as the noble Baroness, Lady Neville-Rolfe, said, there is a weakness in our armour because you cannot argue against them on the grounds of competition. I thank the noble Lord, Lord Naseby. The problem is that it is not within the tools of the CMA. It cannot use as a ground the need to either respond to public policy or promote particular industries. If it does not affect competition, it is not within its powers.

This does need to be added. The noble Lord, Lord Fox, is right that this is perhaps not quite the right mechanism, but we are delighted to know that there is a Bill coming and I look forward to the Minister accepting an equivalent to Amendment 153 at that point. I will, needless to say, use today’s Hansard to support that amendment to get this in then. I look forward to the noble Lord, Lord Naseby, and other noble Lords supporting me at that time.

I wanted to table the amendment to this Bill because of the changes there will be when we have got the internal market growing and we are looking for new investments. Even those who think everything is going to be wonderful after Brexit know that we are going to need a lot of support to get the economy going again after Covid. There is a slight weakness, so it would have been nice to have been able to put this clause in at this point. It was a nice try, but I beg leave to withdraw the amendment.

Amendment 153 withdrawn.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Wednesday 18th November 2020 Lords Chamber

[Lord Beith (LD) [V]]

My Lords, apart from the interesting diversion by the noble Baroness, Lady Jones, into wider issues affecting the House, there has been an air of unanimity in this debate. There has been unanimous support for the amendment moved by the noble Baroness, Lady Andrews, and appreciation of the clear way in which she expounded the need for it. Of course, she is referring to Amendment 7 rather than Amendment 2.

It is unusual for my name and for that of the noble Lord, Lord Callanan, to appear on the same amendment, although we have always had cordial relations. I welcome the Government’s acceptance of the case put to them—at least for this part of the Bill. On government Amendments 29 and 47, it would be churlish not to welcome the review of how delegated powers are used, but this does not answer the case against these powers being in the Bill at all. A number of speeches made that point very strongly.

Henry VIII powers—the Government’s ability to change statute law by means of secondary legislation—are repugnant in all but the narrowest of cases. They have become habitual—a “galloping tendency”, as the noble Lord, Lord Carlile described them. They present Parliament with law that cannot be amended in almost all instances. They are not subject to effective parliamentary scrutiny, partly because of the Government’s control of the Commons agenda and timetable. They can be applied to devolved areas without consent, as the noble Baroness, Lady Andrews, pointed out. From the Government’s point of view, and from the standpoint of legal certainty, it should be remembered that secondary legislation is open to legal challenge in a way that primary legislation is not.

What range of powers are we looking at in these amendments? Amendment 7 would remove a very wide power in Clause 6, allowing the Secretary of State by regulation to change the Act that this Bill will eventually become so as to vary, remove or add to parts of subsection (3). That subsection defines the statutory provisions relating to what is within the scope of the non-discrimination principle. It includes goods, transportation, display, certification and the conduct of businesses. That is where the Government’s offer of a review comes in, but I do not believe this meets the case for amending primary legislation by means of secondary legislation. It is wrong in principle and unnecessary in practice because primary legislation can be brought forward. Parliament can act quickly, and it is generally within the Government’s ability to ensure that it does so.

Secondary legislation is incapable of amendment by Parliament and not open to adequate scrutiny. That is why the Constitution Committee, of which I am a member, and the Delegated Powers Committee have so often argued against the excessive use of secondary legislation, particularly in its Henry VIII form, and I think the case is a very powerful one. It is like the sea trying to wash away a piece of particularly hard rock: we occasionally make some progress with it but before very long we find that we are unable to effectively resist the Government’s permanent tendency to create powers of this kind.

If the noble Baroness decides to test the opinion of the House on this matter, Liberal Democrats will support her amendment.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, as I have said before, the women in the House always get a bit nervous when we talk about Henry VIII. We have only to go outside and see what happened to some of Henry VIII’s women to remind us that we are a bit uncomfortable with him.

The debate has made clear why the amendments in the name of my noble friend Lady Andrews and fellow members of our always brilliant Delegated Powers Committee should be heeded. Indeed, the unanswered question, posed by my noble friend, is why the Government have not removed the powers in Clause 6 in the way that they have now agreed to remove them in Clause 3. Why the inconsistency? What is the difference between them? Our Delegated Powers Committee certainly did not distinguish between the two pillars of the internal market—market access and non-discrimination— so we do not understand why the Government have taken such a different view on those. Without a stunning, innovative answer—the Minister looks as though he may have one, but there was none such in his letter of 12 November to the Delegated Powers Committee—when we come to Amendment 7 a little later, we will throw our weight behind it to remove the sections which, as the noble Lord, Lord Beith, has just set out, give overwhelming power to Ministers. Furthermore, as my noble friend Lady Andrews says, if these are meant to be just backstop powers to correct as yet-unknown deficiencies, then, given that Clause 13 affects all parts of the UK, it should be for Parliament, not Ministers in Westminster, to make any correction, with the full panoply of safeguards that come with primary legislation for input from the two Houses as well as from the devolved legislatures.

It is really not good enough—in a Bill which, after all, they must have known for four years they would need—for the Government at this stage still to be so unsure that they have thought of everything and drafted correctly that they need to accord to themselves these extraordinary powers to amend important parts of what will then be an Act of Parliament. That was never the purpose of secondary legislation. Indeed, as the Minister will know, we feel that it is likely that the proposed use of these ministerial powers is more the result of the Government’s tendency to rely on them rather on than proper primary legislation on a wide variety of measures. Indeed, as the noble Baroness, Lady Meacher, noted, so common has this become that my noble friend Lady Taylor of Bolton wrote on behalf of the Constitution Committee to Mr Rees-Mogg on 9 November suggesting how to diminish the practice, while the noble Lords, Lord Hodgson and Lord Blencathra, from the Secondary Legislation Scrutiny Committee and the Delegated Powers and Regulatory Reform Committee respectively, similarly wrote to Mr Rees-Mogg on 10 November, specifically with concerns about “skeleton bills and skeleton provision”, noting his acknowledgement that delegated powers

“should not be ‘a tool to cover imperfect policy development’”

and reiterating the need for the Government “at all times” to

“fully justify the appropriateness of delegated powers”.

I fail to hear such justification for these particular powers. Therefore, while welcoming the Government’s support for Amendment 2, we will support Amendments 7, 12 and the others in this group.

I am delighted that, because of the acceptance of Amendment 2, my Amendment 4 is pre-empted. For those who do not follow all this, Amendment 4 would have amended subsections (8) to (11), which was a regulation-making power. We were seeking to give the delegated legislatures a say over that. But clearly, as those powers have come out, my Amendment 4 luckily is pre-empted and not needed. However, we will return to similar amendments next week. For the moment, we welcome the moves of the Government on Amendment 2 and, in due course, unless the Minister comes up with a stunning answer in the next few minutes, we will support Amendment 7 in its place.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank everybody who has spoken in the debate so far. Just before we start, let me give my personal support—not a matter for the Government—to the gruesome twosome, the unholy alliance between the noble Lords, Lord Foulkes and Lord Cormack. I hope that we can get back to full and proper debate in this Chamber as quickly as possible. I do not know about other noble Lords, but I quite miss the heckling from the noble Lord, Lord Foulkes; it adds a bit of interest and spice to our debates. I am sure that the noble Baroness, Lady Jones, copes very well with debate in this Chamber, of which she is a noted exponent.

The Government have listened closely to the concerns from colleagues from all sides of the House and outlined in the DPRRC report. I thank your Lordships for the helpful debates that we had, and I hope noble Lords will think that I have responded at least to some of the points that were made. As I set out in my letter to colleagues last week, we listened closely to all your Lordships’ comments and, after further reflection, we are proposing a number of changes in line with many of those comments to how these powers will operate. The amendments will remove powers that are now, on further reflection, considered non-essential and will provide the fullest transparency and accountability in the use of those that remain. We hope that the package of changes proposed will address the concerns that were raised and provide some reassurance that the Government take their responsibilities seriously in administering these powers.

I understand from the comments of the noble Baronesses, Lady Hayter and Lady Andrews, and others that noble Lords intend to divide the House on this issue tonight. I hope that they will consider carefully what we hope will be very welcome steps before voting in a way that will have quite far-reaching consequences for the operation of the UK internal markets. Given that there are no other groupings today and next week on the delegated powers more generally, I hope that noble Lords will allow me to discuss this grouping in a little more detail.

First, the amendment in the name of the noble Baroness, Lady Andrews, will remove the ability of the Secretary of State to amend the list of statutory requirements that are in scope of the mutual recognition principle for goods. While our position remains that the majority of the powers in the Bill are essential, as I said, in this particular case we are now content that the removal of the power will not substantially undermine the operation and flexibility of the internal market system. Therefore, we have removed the power—I have added my name to the amendment from the noble Baroness, Lady Andrews—in combination with further changes on transparency and accountability that we are proposing.

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[Lord Beith (LD) [V]]

My Lords, in answer to the noble Lord, Lord Naseby, the fact that the super-affirmative powers have not been very widely used in the past is really no excuse for not using them where they are an appropriate way of dealing with important statutory instruments and providing a higher level of scrutiny. If the noble Baroness, Lady Neville-Rolfe, doubts the need for more use of the procedure, she should recall all those occasions when we have felt that a statutory instrument should be amended but have had no capacity to do so, and our dislike of a particular feature of it was not sufficient to justify blocking it or turning it down—something, of course, that this House very rarely does. It does address, although not by providing power of amendment, the lack of amendment power which is a characteristic of almost the whole of the statutory instrument system.

An alternative to heckling is the constructive tabling of an amendment, so we should welcome that, and I think that the noble Baroness, Lady McIntosh, and the noble Lord, Lord Foulkes—this new coalition, the Foulkes-McIntosh group—have done us a service in bringing this matter forward. If you worry, as I have done over many years, about the inadequacy of our procedures for dealing with statutory instruments, especially those which try to change primary legislation, super-affirmative procedure, as its name suggests, is better than ordinary affirmative procedure and better still than negative procedure, because it opens up fresh opportunities for how the matter can be dealt with. Because it takes more time, there should be some caution over which things we think it is right to use it for, but it could be much more usefully employed than it has been in recent years. Of course, it is not a single procedure; it is a category of procedure which is usually spelled out individually in the legislation which employs it, as in this case—and the noble Baroness, Lady McIntosh, has improved and added to the process in the version of it that is now before us.

The procedure allows for measured consideration. Sometimes measured consideration is impossible because of urgency, but things are not always as urgent as the Government say they are. Usually the urgency has arisen from the fact that the Government have taken too long dealing with it and have brought it to the House at a very late stage. Throughout the coronavirus epidemic we have had all these occasions when the House has suddenly been told that something is very urgent which the Government have been dealing with for weeks, and probably even announced many days previously, but are now giving the House minimum time to address. The Government cannot always claim that there is an inherent urgency in the situation; rather, they have created urgency by delay at their stages of the process.

Where measured consideration is appropriate, the super-affirmative procedures allow for it and allow the House to suggest amendments to a Bill, which the Government can then go back and consider. I think it has advantages and would have advantages for some of the processes in this Bill. So it is not the wild suggestion that the noble Lord, Lord Naseby, and the noble Baroness, Lady Neville-Rolfe, seem to think that it is. I think it has many advantages which ought to be deployed in circumstances such as this.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, this debate raises an important and much wider issue about how statutory instruments are dealt with and how much consultation goes into them. When we discuss them in the Moses Room, the Minister often hears from all of us: “Who did you consult and can we hear the feedback?” There are some really important general lessons to take from that, because, as all of us who have dealt with statutory instruments will know, often someone gets in touch at the very last moment to say that a statutory instrument does not work for their industry or their sector. Usually it is an issue of practicality rather than the policy, but by then it is too late, which is immensely frustrating.

The problem with the Bill is that we should not have these powers when dealing with policy. It goes back to what I said in the earlier debate: statutory instruments were never meant to be about policy shifts, but about the practicalities or some adjustment. In a way these amendments, whether right or wrong, are wrongly focused. We should not be saying, “These things need lots of scrutiny because they are terribly important.” If they are terribly important they should not be using these powers.

It will not come as a surprise that I much prefer the amendments in my name that we will get to later, since Amendments 4 and 5 were pre-empted. They are also about the internal market. We are talking about regulations that affect the other parts of the United Kingdom, and very few, if any, would have no effect. Our other amendments propose that regulation-making will need the consent of the devolved Administrations unless that has not been possible within a month. In that case this Parliament will be able to put them through, but with a reason why it is doing so without the consent of the devolved Administrations. This is interesting, and in a way has a much shorter term than this amendment. It is more focused and specifically looks at this Bill, which is about producing regulations that affect the other four nations. I am sorry, but I prefer my amendments to these ones. The issue of scrutiny of statutory instruments is serious. Maybe we can get a better practice so that we do not end up with stuff that is not quite fit for purpose, and which it is then too late to do anything about.

[Lord True (Con)]

My Lords, I am grateful to those who have spoken in the debate, which I will try to sum up briefly. As the noble Baroness, Lady Hayter, indicated, because of the quite proper impact of the pre-emption rule, and of how the Bill is grouped and how we consider it, there will be further opportunities to address in a later group the points she raised and those raised my noble friend Lady Neville-Rolfe on the appropriateness of the use of powers. Obviously, most amendments in this group follow on from and, as the noble Baroness, Lady Hayter, said, precede discussion on powers that are all exercised in the Bill as drafted by the affirmative resolution procedure.

We contend that those powers are necessary to provide flexibility to respond to future developments in the provision of goods and services trade. As my noble friend Lord Callanan said, and I venture to suggest might say again, we are fully committed to ensuring that these powers are used appropriately. The powers will be subject to parliamentary oversight to give them the widest legitimacy, which means that we will consult appropriately on the use of the power, including with each of the devolved Administrations.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I start by bringing to the attention of the House an inadvertent error that I made in one of my replies last Wednesday. In response to the noble Baroness, Lady Ritchie of Downpatrick, I misread my note on the relationship between the non-discrimination principle and employment law requirements, and got one word wrong. I should have said:

“If the employment law requirement were to meet that test, they would not be disapplied unless they had discriminatory effects.”


I reassure that House that my misspeaking in this case was, of course, entirely unintentional.

To be absolutely clear about this point, we have already delivered the relevant legislative measures to give effect to Article 2 of the protocol. I again assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward and will not be impacted by the outworkings of this Bill. Even if employment law requirements were in scope of the non-discrimination principle, which they would not generally be as they would have to relate to goods sold, they would not be disapplied unless they had discriminatory effects. As I said to the noble Baroness, Lady Ritchie, last week, I would be happy to facilitate a meeting between her and interested parties and the relevant Ministers and officials, and I stand by the commitment that I gave then.

On the subject of today’s groupings, the amendments in my name would ensure that the Government consult with the devolved Administrations when seeking to use powers. As we made clear in Committee, if the powers are required, we will of course engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. We have been listening to colleagues in the House and appreciate that there is an appetite for these commitments to be included in the Bill. We are therefore introducing these amendments to put beyond doubt our commitment to consult each of the devolved Administrations if any of the relevant powers are used. The consultation requirements and the commitment behind them are clear. However, once consultation is undertaken, the right place for final decisions should be back in Parliament, where parliamentarians from all parts of the United Kingdom can debate and vote on the proposed use of these powers.

It is also worth noting the separate amendment we have tabled, requiring the Secretary of State to review and report to Parliament on the exercise and effectiveness of the powers in Parts 1 and 2 within five years. That will provide an additional degree of accountability and scrutiny, and will again involve consultation with the devolved Administrations—something that I know the House is keen on. For the reasons I have set out above, I hope that noble Lords will accept the amendments in my name, and agree that Amendments 18, 32 and 43 are therefore unnecessary.

Having set out the reasonable measures that Government have tabled, I turn to Amendments 15, 20, 34, and 46. These seek to add additional processes around devolved Administration consent before use of the relevant powers. We have been listening to noble Lords and appreciate the appetite for these commitments on devolved Administration engagement to be included in the Bill. As I have already explained, we are therefore seeking to amend this clause to require consultation with the devolved Administrations prior to use of the power, putting our commitment beyond doubt. As part of this, we will of course set out reasoning for seeking to use the powers, both to the devolved Administrations and to Parliament. We will also seek to reach agreement with the devolved Administrations wherever that is possible. Because of this, it seems to us that putting into legislation the process proposed by noble Lords in their amendments would be duplicative and unnecessary. For these reasons, I hope that the amendments we have already tabled address the concerns of noble Lords, so these amendments are unnecessary.

Amendment 16 requires the publication of the results of consultation on the exercise of the power in Clause 8. While this power was removed from the Bill last week, I will speak briefly about the Government’s position on the subject. The exercise of this power would require consultation with the devolved Administrations. They are perfectly capable of deciding to publish their responses if they so choose. It is not necessary to make that choice for them in this Bill. For these reasons, I ask the noble Baroness not to press that amendment either.

Amendments 26, 27 and 28 would require the Secretary of State to consult all three devolved Administrations before preparing, revising or withdrawing guidance on the operation of the UK market access principles. Amendment 27 specifically stipulates that the Secretary of State should seek the consent of the devolved Administrations. However, should formal consent not be received within a month, the Secretary of State may proceed none the less. This amendment further states that where the Secretary of State makes regulations without obtaining consent, he must publish a statement explaining why. The guidance is itself explanatory; it is important to note that it is not a power to make or amend regulations.

It goes without saying that as part of the guidance process we will engage with all the relevant stakeholders, including the devolved Administrations, because we are committed to helping regulators and traders understand the principles and make the best possible use of them. However, this guidance will not change the rules that apply, so the formal consent of the devolved Administrations should not be required. It is also unnecessary to have a legislative consultation process with the devolved Administrations alone in respect of the guidance, when the guidance will be explaining, not making, the law.

I hope that with those words I have reassured noble Lords on this matter and they feel able not to press their amendments. In the meantime, I beg to move.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, first, I thank the Minister for his correction on the unforced error, I think it is called, in what happened on Wednesday. The noble Baroness, Lady Ritchie, will be speaking later and I am sure will comment on that; I hope the House can let her even if it is not specifically in this group. When the Minister responds, I would ask him to ensure the meeting that he has kindly offered takes place before Third Reading, so that if anything needed adjustments, we would be able to look at it at that point. As I say, I am absolutely certain that it was an unforced error, but it would be nice to have that clear.

We are pleased about parts of this, and certainly the review of the use of powers. It may seem odd to the House that we are continuing with these amendments, almost all of which—the guidance being the exception—set down how regulations should be made, even as the very power to make such regulations is about to be removed from the Bill. Nevertheless, we are in agreement with the Minister that it is helpful to deal with the amendments in his name and those in mine and others’ which deal with how these powers would be handled, should they be put in.

Therefore, it is helpful to have our Amendment 15, which I will formally move in due course, as well as Amendments 20, 24 and 26 in the Bill, so that the Commons and the Government will be well aware—assuming that our amendments are passed—that this House would expect any regulation about the functioning of a market across four nations to be made in partnership with those other three participants.  

  Amendment 15 and the others go further than what the Minister has offered in his. He has quite rightly added consultation; ours go further than that, but they do not hand a veto to any one of the devolved authorities. What they do is take further the welcome admission by the Government, in their Amendments 14, 19, 36 and 45, that it would be unthinkable to make regulations affecting devolved competences without consulting their Governments and legislatures. Our further step is to add some grip to the consultation by making it a proper involvement. The amendments say that the devolved authorities must either give their consent to the regulations within a month, or else the Government can continue but would have to explain to Parliament and the public why they were proceeding without agreement. This does not seem much to ask. It will not cause any delay, but it would ensure that there was no risk of any tokenism in the consultation. Instead, the devolved authorities will have to reply, and speedily, and the Government would simply have to explain why they wanted to proceed contrary to any of the devolved authorities’ views before proceeding. 

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Moved by

[Baroness Hayter of Kentish Town]

15: Clause 8, page 7, line 4, at end insert—
“(8A) Before making regulations under subsection (7) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(8B) But the Secretary of State may make regulations under subsection (7) without the consent required by subsection (8A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it. (8C) If the Secretary of State makes regulations without the consent required by subsection (8A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”

[Baroness Hayter of Kentish Town (Lab)]

I wish to test the opinion of the House.

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Moved by

[Baroness Hayter of Kentish Town]

17: Clause 10, page 7, line 23, leave out subsections (2) and (3)

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Moved by

[Baroness Hayter of Kentish Town]

20: Clause 10, page 7, line 25, at end insert—
“(3A) Before making regulations under subsection (2) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(3B) But the Secretary of State may make regulations under subsection (2) without the consent required by subsection (3A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(3C) If the Secretary of State makes regulations without the consent required by subsection (3A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”

--- Later in debate ---

Moved by

[Baroness Hayter of Kentish Town]

27: Clause 12, page 8, line 31, at end insert—
“(4A) Before issuing, revising or withdrawing any guidance under subsection (4), the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.(4B) But the Secretary of State may issue, revise or withdraw any guidance without the consent required by subsection (4A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(4C) If the Secretary of State makes regulations without the consent required by subsection (4A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”Member’s explanatory statement
This amendment ensures that the Secretary of State must consult with the devolved administrations before revising or withdrawing guidance under Clause 12.

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Moved by

[Baroness Hayter of Kentish Town]

31: Clause 17, page 12, line 35, leave out subsections (2) to (4)

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Moved by

[Baroness Hayter of Kentish Town]

34: Clause 17, page 12, line 42, at end insert—
“(3A) Before making regulations under subsection (3) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(3B) But the Secretary of State may make regulations under subsection (3) without the consent required by subsection (3A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(3C) If the Secretary of State makes regulations without the consent required by subsection (3A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”

[Baroness Hayter of Kentish Town (Lab)]

I beg to move Amendment 34.

[The Deputy Speaker (Baroness Henig) (Lab)]

No, you cannot; it has been pre-empted by Amendment 31. I am sorry.

[Baroness Hayter of Kentish Town (Lab)]

I think the agreement is that it will stand in its place anyway.

[The Deputy Speaker (Baroness Henig) (Lab)]

My advice was that, if Amendment 31 was agreed to, Amendments 32 to 35 would have been pre-empted. That was certainly the legal advice that I read out right at the beginning.

[Baroness Hayter of Kentish Town (Lab)]

The issue is that, although the regulations have been taken out—as with my Amendments 15 and 20 that have already gone before, and indeed Amendment 19 in the name of the Minister—the agreement was that the way we deal with them would nevertheless stand. That is why Amendments 15, 19, 20 and 27 were all allowed.

If it has been pre-empted, may I suggest that we vote on it? I gather that the Government will not resist, and I am sure that the clerks can then disallow it should they find that we should not have done it. I beg to move.

Amendment 34 agreed.

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Moved by

[Baroness Hayter of Kentish Town]

42: Clause 20, page 14, line 38, leave out subsections (8) and (9)

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Moved by

[Baroness Hayter of Kentish Town]

46: Clause 20, page 14, line 41, at end insert—
“(9A) Before making regulations under subsection (8) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(9B) But the Secretary of State may make regulations under subsection (8) without the consent required by subsection (9A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(9C) If the Secretary of State makes regulations without the consent required by subsection (9A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”

--- Later in debate ---

Moved by

[Baroness Hayter of Kentish Town]

51: Clause 25, page 19, line 25, at end insert—
“( ) Section 22(2) does not apply if the provision has been agreed through the common frameworks process.”

--- Later in debate ---

[Lord Fox (LD)]

That is just proof that you can take the Peer out of Tesco but not Tesco out of the Peer.

My noble friend Lady Randerson hinted that she thought the Minister might be developing emotional intelligence—or perhaps we will see signs of that later. However, I think that most of your Lordships have welcomed the government amendments in this group. They are showing movement in the right direction and are an improvement on what you would expect those of us on these Benches to condemn as a deeply flawed Bill.

My noble friends Lady Bowles and Lord Bruce both made the point about where the OIM is and its presence in the CMA. We are not debating that in this group, although we will be some other time. However, Amendment 54 and consequential Amendment 59 should be seen as the safety belt in the event that the OIM remains within the CMA.

The noble Lord, Lord Naseby, made a powerful speech against Amendment 54. I did not see him in his seat when the noble and learned Lord, Lord Thomas of Cwmgiedd, was giving his strong endorsement of his amendment. He may have been oscillating somewhere between virtual and physical; if he was, I apologise. In his speech, the noble and learned Lord, Lord Thomas, put forward a very important point. The CMA is getting considerably more powers as a result of the Bill. The point he did not make but inferred is that those powers move from being reserved powers to those that step into the realm of devolved powers—there can be no doubt about that.

There is therefore a significant change in the nature of the task that the CMA is overseeing. The Government may say it is too much trouble to change the nature of the governance of the CMA, but its focus is changing from reserved issues to those which cover devolved matters, so that change should be reflected in its governance.

My noble friend Lord Bruce talked about unintended rather than intended consequences. The Government need to create a board that can reduce the number of unknown unknowns that it encounters. Amendment 54 is a perfectly reasonable amendment, which would make sure that there are people on the board who understand the nature of the markets in the devolved countries.

To take the point made by the noble Baroness, Lady Noakes, one would hope that the careful construction of a board would understand the need for that. I have to tell your Lordships—and perhaps the principles of my noble friend Lady Bowles could be passed to some Cabinet members—that the construction of boards and organisations over the course of the last 12 months has been nothing like a careful assembly of the right people. It has been a gathering of friends and known people to do the bidding of the Secretary of State. Therefore, it is right for the opposition to be very suspicious about the future board of the CMA, which will have this extraordinarily bumped-up role. That is the reason for Amendment 54 and also for consequential Amendment 59.

The noble Baroness, Lady Noakes, is correct. In a sensible world, what she suggests would happen. However, we cannot trust that to go forward, and trust is going to be very important with regard to the devolved authorities and how they work with the CMA if, indeed, the office for the internal market is located within it.

The noble Lord, Lord Wigley, the noble Baroness, Lady Finlay, and my noble friend Lady Randerson gave wise advice: rather than politicise the CMA, this is helping to inoculate it from political suspicions. That is why, if the noble and learned Lord, Lord Thomas, seeks to put it to the House, we Liberal Democrats will support Amendment 54.

[Baroness Hayter of Kentish Town (Lab)]

I join others in thanking the Minister for some significant moves in the amendments that he has introduced today. As others have said, it is testament to his having listened. He sometimes thinks that means “listened at length”, but he listened, considered and responded, and we welcome all the changes. I am particularly pleased about the acknowledgement in the amendments of the interests of consumers in the mapping out of the new internal market. The House will be pleased about the recognition of the need for experience across the kingdom in the appointment of the OIM panel and the need to seek the consent of the devolved authorities to such appointments.

Similarly, we welcome, perhaps unsurprisingly, the new requirement for the CMA to lay its key documents before all four legislatures. It is possible that they already do it, albeit perhaps as a courtesy rather than a legal requirement. We also strongly welcome Amendments 56 and 57, which require devolved authorities to give their consent within a month to appointments to the OIM panel. We like that—consent within a month; we have heard it before. We pinched the idea from the Minister’s words, but it is a good one. As we proposed in our amendments, if the Government proceed with an appointment despite consent not being forthcoming, they will have to explain why they are doing so. Therefore, we will not move Amendment 59.

However, the Minister will not be surprised to hear that, although we welcome these changes, we would like to nudge them a little further. On Wednesday, as others have said, we will seek to move the OIM out of the CMA. Just in case it remains in the CMA, it is vital, as the noble and learned Lord, Lord Thomas of Cwmgiedd, and others have said, that the CMA, in accepting this new role, amends its structure to accommodate the change. It is impossible to think of any other national organisation, when its remit changes, not revisiting its governance and appointments. It should not just continue with business as usual when taking on a whole new responsibility.

Indeed, although we welcome Amendments 56 and 57, we were surprised that they did not apply to the CMA as well as to the OIM panel. For an overarching body with a purview of the development of the new internal market architecture, not having to feel the pulse of, understand and have input from the constituent parts is a little odd, to say the least. For all its board members to be appointed by just one of the four Governments is particularly hard to understand, because it is a body covering the competences of all four Governments. If it was covering only the reserve competences, one could understand, but it will cover powers that affect the area of all four Governments.

As was said by, I think, the noble Baroness, Lady Noakes, if you are appointed by one place you somehow feel like a representative from it. I must say something about other boards and committees that I have sat on. It may not be a board of this nature, but the National Consumer Council included someone from the Northern Ireland Consumer Council, as I think it was called, someone from the Welsh Consumer Council and someone from the Scottish Consumer Council, but once they got on the board, they had responsibility to it as a board member. Just because we brought in someone with different responsibilities, it did not suddenly make them a representative. Similarly, the chairs of the different sub-committees of the Financial Reporting Council sat on the board. They came with that experience but, once they sat on the whole-council board, their responsibilities included that.

It is slightly hard to say that just because people are appointed by different Governments, they are then answerable only to them. Given that they would be appointed by only one Government, and given that people are saying that if you are appointed by the Welsh Government, you are then a representative of the Welsh Government, surely if you are appointed by the UK Government you also are not independent. It does not quite make sense to me.

We will shortly vote on Amendment 54 in the name of the noble and learned Lord, Lord Thomas. The Opposition will be happy to support it, to ensure that the CMA really does act on behalf of the whole of the United Kingdom.

[Lord Callanan (Con)]

I can be brief, on the basis that I went through the amendments in detail in my opening remarks. I thank all noble Lords who took part in this debate very much.

I say to the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Thomas, that the Bill is not a smonach at all. As I am from the north-east, I can say that, despite all this, I still consider them both marras and not at all workie tickets—I suspect that all this is driving our Hansard copywriters into a bit of a radgie.

I reiterate that my amendments to Part 4 will ensure beyond doubt that the OIM will operate in the interests of both UK consumers and all four Administrations on an equal basis. I thank my noble friend Lady Noakes in particular for her important observation that the CMA board appointments are there first and foremost to ensure that the organisation operates effectively.

I wish to emphasise strongly that changing the wider CMA structures would be wholly unnecessary and create a deeply unhelpful precedent in so far as DA appointees would have a say on reserved matters. In contrast, the OIM panel will undertake the work of the OIM. It is in that context that the government amendments have been brought forward. I believe that this directly addresses the points made in this House, ensuring that the devolved Administrations have greater involvement in OIM appointments. I therefore hope that the House will be able to accept these amendments.

There were a couple of questions. The noble Baroness, Lady Bowles, asked me to define the panel requirements. Amendment 55 makes clear the Government’s view that a balance of expertise in the round on the panel from which task groups are drawn is important. Schedule 3 makes it clear that such task groups must

“consist of at least three members”,

and therefore may contain more. We have argued consistently against a hard distinction between panel members and assigning specific members to specific parts of the UK. In my view, it would be a failure if there was seen to be an “English panel member” and a “Welsh panel member” who are then somehow adversarial.

Finally, I say in response to the noble Lord, Lord Bruce of Bennachie, that I have consistently made it clear that the functions of the OIM cover advice, monitoring and reporting only and cannot force regulatory change of any kind.

With those remarks, I hope—though without much expectation—that noble Lords will not press their amendments and I commend those in my name.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, partly for the reasons that the noble Lord, Lord Fox, has given, this has been an interesting debate, with some flying in without any original intent but also from across the House. It highlights many of the issues facing what was meant to be an “oh so easy” departure from nearly half a century of EU membership. Practices and rules within the EU developed over years, with input and experience from business and consumers and the experience of how things worked, and from Governments, regulators, courts and lawyers. As my noble friend Lord Liddle said, there were umpteen harrumphs, grumphs and complaints from the Minister and others who are not supporters of the EU, but the rules were created in that way. They were created by discussion, experience and by knowing what was needed when. They were not written hurriedly over the summer, as we know the Bill was.

The creation of an internal market, covering four parts of the UK with their own Governments and competences, needs as much careful thought, planning and, especially, consultation and joint decision-making as has worked so well across the EU as its single market developed. It is sad that some of these amendments need to be written into legislation—we hoped they would have been taken for granted. But we need to set down that the devolved authorities should, of course, be consulted at any stage of decision-making, and we therefore welcome Amendments 62 and 63 in the Minister’s name, and welcome this formalising of the devolved Administrations’ rights and roles.

The other issues raised by the noble Baronesses, Lady Bowles, Lady Altmann and Lady Noakes, are clearly accurate in their specific content. Our only problem with them, especially given the vital three issues in the Bill—Part 5, the Henry VIII powers and devolution—is that they are probably not the right subjects on which to ask the Commons to think again, but we would like to ask the Government to think again. There are some really big questions that we need the Commons to consider. Our fear is that sending Amendments 62A and 63B back to the Commons simply would not serve a purpose. It normally takes a nanosecond for them to be overturned there when, actually, we want to get the attention of the Minister and Government.

I have a slight problem with the idea of releasing small businesses from all penalties. We do not do that in other areas, in particular with health and safety. Offering a complete safe haven in all circumstances could be detrimental to consumers and employees—but that is a small point. More serious is the wider issue touched on by the noble Baroness, Lady Noakes, of whether these information-gathering powers are right. As the noble Lord, Lord Fox, said, the OIM is being shoehorned into the CMA, and the fit simply does not work. As a regulator, the office for the internal market would be better tailored to be independent, so it could develop rules, a code of practice or any penalties needed suited to the task in front of it, rather than brought over from elsewhere. We are going to discuss that later: the big issue of whether the OIM should indeed be part of the CMA.

My plea to the movers is not to put this to a vote today. My guess is that the Minister would prefer that, because he would be able to wait for the other place to overturn it, which is not what we want at all. I worry that it would detract from the big issues, but it would also not deal with the broader issue of how the OIM will work. For that reason, we do not support it. I do not think it is the right way of dealing with an important issue.

I make one further point on how devolution is to be strengthened, which is part of the noble Lord’s amendments. It is about recognising the devolved authorities, as we implement the plan in the Bill to make an internal market work. The Minister has protested throughout that the Government are committed to the common frameworks process and that they have not retreated from the principles under which they were set up in 2017. Ministers have said that they respect the hard work that has gone into making these frameworks over the last three years, and the way in which they are pioneering new ways of working between the four countries and the harmony, as well as harmonisation, that has emerged. They have reiterated praise of the common frameworks, at the same time as saying that they are inadequate, partial and need to be overtaken by the Bill, rejecting all evidence to the contrary and despite public concern that the Bill will lower standards and provide less certainty than the frameworks will.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Wednesday 9th December 2020 Lords Chamber

[Lord Fox (LD)]

My Lords, throughout the many stages of this debate the common frameworks have been given a great airing, and many of your Lordships have had a chance to vent their respective spleens on the subject. The Minister may be assured that my spleen will remain in its correct place, because enough has been said on this issue. Indeed, he observed that noble Lords have made their position on common frameworks very clear.

However, the Government have shown great and steadfast reticence on writing the common frameworks into this Bill. The Minister set out two reasons for this: first, in stressing the word “voluntary” on several occasions, and, secondly, in pointing out the joint ownership of the common frameworks between the devolved authorities and the UK Government. On that second point, have any of the devolved authorities objected to the idea that common frameworks might be a central part of this Bill? I have seen no such objections; on the contrary, I have seen enthusiasm from devolved authorities that this might happen.

The noble and learned Lord, Lord Hope, has drafted elegant solutions in his amendments, which I hope will help the Minister to get to the point of developing the market access principles and legal certainties—the Minister is right to say that we need them—but, at the same time, respecting the devolution settlement. A key part of the noble and learned Lord’s speech was about the respect that this Bill needs to show the devolved authorities and the settlement that has developed so well there.

I was impressed by the tone of conciliation and consultation in the Minister’s speech, which came through in his “willingness to continue to engage in discussion”, “discussions have not been exhausted” and “open to discussions.” The door is clearly open. With respect to the noble Lord, Lord Naseby, there is time; I have also worked in commercial life and while the idea of “give me certainty” works within a correct framework, if it is “give me certainty” in a terrible framework then I would rather wait a little and get it right. We can spend a few days more getting this right. A vote for the amendments set out by the noble and learned Lord, Lord Hope, would help keep the door open for those discussions with the Minister. That is why we on these Benches will vote in favour of them.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the noble Lord, Lord Callanan, who is not in his place, will recall how the notion of common frameworks evolved. When we were doing the first EU withdrawal Bill, it became clear that some of the powers returning from Brussels clearly fell within devolved competences. It was therefore widely understood that, to facilitate trade throughout the UK—as otherwise the rules affecting trade could vary across internal borders—a coming together of the four authorities would be needed to balance the desire for, and attraction of, diversity on some issues with a UK-wide approach to help consumers buy and manufacturers trade throughout the UK.

From the start, it was agreed that such frameworks would be established where needed—this is from the communiqué of October 2017—to

“enable the functioning of the UK internal market, while acknowledging policy divergence”

and that they would

“respect the devolution settlements … based on established conventions … including that the competence of the devolved institutions will not normally be adjusted without their consent”.

That was how they started. At that point, a list of 24 such topics was identified and, with a lot of good faith and hard work—as the Minister has acknowledged—the initial three Governments, along with Northern Ireland officials, set to work developing frameworks to enable that UK-wide market to flourish while recognising where devolved authorities might want variations for whatever reason. The basis was, to quote again from that document signed by the Government, to

“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory”.

Until this Bill arrived, everyone thought the system was working well and would accomplish the aims set for it. This should have been something for the Government to celebrate, as they have today, and build on. In fact, it has never been necessary for the Government to use their powers to freeze any devolved authority’s power—a provision set into the EU withdrawal Act, as the Minister has acknowledged.

While this Bill was anticipated, the expectation was that it would help build a new, in some ways unique, internal market across our four nations, which have different cultural, linguistic, agricultural, geographical and industrial histories and realities. Above all, our nations have different democratic governance structures from when we ceded rule-making to the EU in 1973. We thought the Bill would respect the devolution realities while helping to ensure the UK market could prosper for the sake of business, consumers, workers, our agriculture and the environment. As we now know, in addition to throwing the quite unnecessary Part 5 grenade into the Bill, the Government pulled the pin on another grenade by writing into the Bill market access rules which trumped, rather than solidified, the common frameworks programme, which is an approach built on consensus rather than top-down diktat.

The noble and learned Lord, Lord Hope, is not a revolutionary. He is not trying to rewrite the Bill. He is seeking—rather like the Minister himself through the Government’s welcome amendments on regulation-making, for which we will give thanks when we come to them later—to start the process on the basis of consent across the four devolved authorities, and, where that is not possible, leaving it to the UK Parliament, rightly, to legislate. We support a union, and therefore we support Parliament’s right at that point to have its proper role. But we start with consent, and then move to Parliament. What we do not support is starting here in Parliament and government, rather than with the four-party common frameworks. So, we welcome the noble and learned Lord’s upending of the procedure, starting with common frameworks and, where or if those do not work, using the market access approach of the Bill in areas obviously otherwise within devolved competencies.

I think we would all warn the Government to be very careful about clawing back decisions from our now quite long-established devolved settlements. I find today’s vote in the Senedd, by 36 to 15, to deny legislative consent to this Bill extraordinarily regrettable. It is an important Bill; it is not a small one. That was denied because of the message sent to Wales and the other devolveds by the rejection in the Commons last night of this approach. So we need a backstop for any failure to agree, but we fail to understand that what should be a backstop has become the starting gun.

The amendments in the name of the noble and learned Lord, Lord Hope, build on the devolution settlements and would support and strengthen the union, as well as creating what we all want: a successful, growing internal market, which is in the interest of all our citizens. We are right, as my noble friend Lord Adonis said, to ask the Government very genuinely to think again about the mechanisms—because that is what we are discussing—to achieve what I think we all want.

The noble and learned Lord, Lord Hope, said that if there was a will on the Government’s part to make the common frameworks system work, a solution could be found. Along with the noble Lord, Lord Fox, we concur with that view, and we welcome the Minister’s saying that “discussions are not exhausted”—I think I have his words right. Whether we do that by recognising the framework system in some way, extending the freeze provisions when they expire or pausing market access for a period of time while the four Governments talk—as mentioned by my noble friend Lord Adonis—there is surely a way forward. But I believe we need this amendment to get the Government to continue to discuss, so that we can get that way forward. That is why we will support the noble and learned Lord, Lord Hope, when he calls for a vote shortly.

[Lord True (Con)]

My Lords, I am grateful to all those who have contributed to this short debate and for the general tone of the interventions made. I was of course intrigued by the noble Lord, Lord Adonis, who emerged as a tribune of the people in this august senatorial assembly with his powerful oratory—a latter-day Gaius Gracchus, who said that your Lordships should reject everything sent to us by another place as a constructive contribution to law-making. I would respectfully give to the noble Lord, and indeed to any others who may share his views, the advice I would give to an overweight gentleman like myself: rejecting some of what is set before you, whether it is legislation or food, may well be desirable from time to time, but to reject everything is not conducive to the health of the legislature or of an individual. I hope that rather “Radical Jack” approach will not carry too much weight on the Opposition Benches.

I preferred the broader tone of the debate, which, as I heard it, actually reflected this Government’s resolve and the resolve of the parties represented in this place, at least—I cannot speak for down the Corridor: that all of us are committed to the security and future of this great union, to the common frameworks process and, as part of that, to hopefully developing further the next stage of inter-governmental relations, as I have explained to the House during the course of this Bill.

This Bill, however, works in tandem with the common frameworks programme by providing a broad safety net and additional protections to maintain the status quo of seamless intra-UK trade across all sectors of the economy, and there ought to be agreement on that in your Lordships’ House. It will ensure maximum certainty for businesses and investors, both domestic and overseas. I agree with what my noble friend Lord Naseby said from his perspective and experience in business. I am sure all noble Lords at heart support that objective and understand the need for a coherent internal market.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Consideration of Commons amendments
Monday 14th December 2020 Lords Chamber

[Lord Fox (LD)]

My Lords, I thank the Minister for clearly setting out his objections to the last set of amendments. In his closing words he said that the Government view the common frameworks process as complementary to the market access principles. Listening to the noble and learned Lord, Lord Hope, it was very clear that there is a discontinuity—a lack of complementariness—between the two positions. As the noble and learned Lord set out, a central feature of the framework agreement is to come to an agreed process for divergence between the four nations, within which the UK has a major role. That divergence is killed off by the automatic nature of the market access principles. That is the central point that the noble and learned Lord’s amendments address. In doing so, the new versions of the amendments have taken on board the comments that have come back from the other place, having recognised the level of uncertainty that could have been injected by a previous proposed new clause, which has now been removed. The amendments adopt the regulations within the Bill to facilitate that decision, so that it is consistent with the way that the Bill seeks to operate, but also consistent with the principles of devolution that have served this country so well to date.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, perhaps we need to remember why we are here. It is really quite simple. When the case for Brexit was all about “taking back control”, we failed to understand that the Government meant taking control to themselves, even over issues that were fully devolved. However, when the Bill was published—without any involvement from the devolved authorities, remember—we soon discovered that it ran roughshod over devolved competences, as the noble Lord, Lord Fox, said, trumping the common frameworks programme.

I have often wondered whether this was deliberate or an oversight, though the lack of prior consultation suggests the former. However, that makes the statement on the publication of the Bill, on 9 September, signed by the Scottish Secretary but not the Welsh Secretary, and by Mr Sharma and Mr Gove, a bit strange in the light of this Bill. It says that the devolved Administrations will enjoy a “power surge” when the transition period ends.

Let us take that at face value. Perhaps the particular construction of the Bill was clumsy—as an oversight rather than deliberate—and perhaps it is right that the Government did not intend to bring back to themselves all the powers long devolved to the other three authorities, but in that case the amendments tabled by the noble and learned Lord, Lord Hope, would rectify the problem. They would simply restrict the market access powers in the Bill, which of course are only about devolved competences, to those where the four-party process failed to reach agreement.

As the Government are one of those four parties, they will be in a very strong position to revert to the Bill, and to Parliament, for the powers they feel are vital for an internal market on areas where disagreement cannot be overcome. That seems, to this side of the House, a simple, clean solution. It would hard-wire in a common frameworks process which the Government themselves described last week in the latest of their three-monthly reports on the frameworks—reports which, I think, we added to Schedule 3 to the EU withdrawal Bill as a requirement for the Government to publish—as

“an agreed approach to ensuring regulatory coherence”

in devolved areas. That is absolutely spot on—coherence, not uniformity—and that is probably where we are trying to get to. The problem is that, as written, the Bill adopts “uniformity”.

The same document, which has just been published, despite having talked about coherence, then asserts:

“Common Frameworks cannot guarantee the integrity of the entire UK Internal Market.”


However, the document does not provide any evidence of why the frameworks will not work. It gives no examples of where, within devolved competences, any agreements might not work. Indeed, the Minister, in introducing the debate, again asserted that it would have to be for Parliament alone to decide when the market access rules would not be used, but he did not explain why the four-party process would not be able to deal with that and why they would come to Parliament only when there was a failure to agree. The same document notes the “freezing power” contained in the withdrawal Act, and it also notes that it has never needed to be used, but it fails to suggest where it might be needed.

Therefore, in the Bill the Government are saying that on the one hand the frameworks are very good and have been able to produce coherence but, on the other hand, the Bill allows the market access principles to trump that process, even if it produces agreement.

We have it said before and I say it again: we on this side of the House want an internal market which thrives and serves the needs of business, the professions, consumers and the environment, but it has to be one that respects rather than dismantles devolution. These amendments seem to us to offer the path to achieve that, so we will support the noble and learned Lord when, as I am sure he will do, he asks the House to vote. I hope that in the light of that vote we can, as the Minister suggested, continue the dialogue so that we can reach an agreed position that would safeguard all that has been going on with the devolution settlements and the common frameworks process but, in the last analysis, would of course come back here.

United Kingdom Internal Market Bill

Baroness Hayter of Kentish Town Excerpts

Consideration of Commons amendments
Tuesday 15th December 2020 Lords Chamber

[Lord Fox (LD)]

My Lords, I will not go through the same list of people to thank as the noble Lord, Lord Stevenson, and the Minister did. I just want to add my thanks and express my admiration for the dogged wisdom of the noble and learned Lord, Lord Hope, in getting us to this point.

Never knowingly unchurlish, I would say that this Bill is not the direction we would have chosen to go in—that is a fact—but, over the course of the past five weeks, I have become absolutely convinced that, thanks to the dialogue between all the parties involved, this Bill has been improved substantially. The illegality was taken out, of course, but the sensitivity toward the devolution settlements, which was not there to start with, has been gradually installed, piece by piece. To get there, we have talked of Welsh coal. We have talked of Scottish teachers. We have talked of drinking straws and Scotch whisky, and of many other examples.

In our thoughtful debate, we have heard from people—including Members on these Benches—who care passionately about the union and felt that things had to happen to this Bill. It is with great pleasure that I can say that many of those things have happened; we are in a much better place and, clearly, look forward to hearing what the devolved authorities have to say.

If I have one reservation, it is about the mechanics of how this market will work and how the office for the internal market will sit alongside the CMA going forward. Clearly, that story may well run but, as the Minister set out, the OIM will have a pivotal role in monitoring how this market runs and in informing the process. How that is configured, who is in it and what its process are will, in the end, be the measure of how successful, smooth and, frankly, unfettered this internal market ends up being.

With those words, I again thank the Minister and his colleagues, and give a special mention to the Bill team, which has also worked relentlessly on this. We look forward to sending the Bill away from this place unmolested by any further amendments.

[Baroness Hayter of Kentish Town (Lab)]

I also welcome the Motion moved by the noble Lord, Lord Callanan.

We are delighted that the Government have responded to the repeated and really quite strongly supported urgings from this House to hardwire, if you like, the common frameworks process into the Bill. After all, as we have heard, the Bill was introduced to deal with powers returning from the EU—powers that are devolved but might need to be used in ways that would not interfere with the development of our own UK single market.

Indeed, it was for that reason that the common frameworks process was established in 2017. The Government are about to write into the Bill—in a few moments’ time, when we will vote for it—that, in cases where a particular divergence in a market area is agreed under the common framework, such an agreement can be exempted from the market access principles. This recognises in law that uniformity is not always necessary in an internal market, allowing some divergence and differences to suit the particular circumstances of parts of our union.

Furthermore, as has been said, a review will take place to judge how that interplay between the framework and the market access principles is working in this new internal market. We hope that this review will show that a consensual approach to these issues works well with the wider aim of achieving a successful internal market. However, as the noble Lord, Lord Fox, said, it will also be interesting to see whether the review looks at how this works with the CMA and the OIM. We all have a lot to learn on this.

The Motion means that the frameworks are included in the Bill, which was lacking at the beginning. I thank Ministers for finding a route forward. I think they sometimes have to break more arms on their side than on ours—though they would know more about that than we do. We join them tonight in confirming the recognition of the devolved settlements and our wish to strengthen both devolution and the future of the union. We see those two aims as entirely compatible and I think they do too.

As we close this chapter of our adjustment to the post-Brexit situation, we also thank the Ministers for their other amendments, to ensure that the OIM appointments and most regulations are agreed with the devolved authorities. I think the Minister had a hand in the recognition of my particular pet project of recognising the importance of the internal market working for computers—sorry, consumers; too much time on Zoom. I do thank him personally; I know he had more than a little hand in that.

I thank all concerned. The Bill team have worked wonders. All those who have voted have enabled us to push on this. I thank the magnificent Lords clerks who have worked against the clock and conflicting interests to get this done, our colleague Dan Harris, my noble and learned friend Lord Falconer and my noble friend Lord Stevenson, who has led us on the Bill so well. I also thank our very special Leader, who gets us all here, my noble friend Lady Smith of Basildon. For the moment, let us put this Bill to bed.

[Lord Callanan (Con)]

There is a new “computers for consumers” skill that we also need to get passed in a future amendment. As the debate draws to a close, I am once again enormously grateful to those who have contributed to the discussion. These debates have been noteworthy for the breadth of ground covered and the depth of expertise on display. Everyone has acted in the finest traditions of your Lordships’ House. I would like to put on record my thanks for the contributions of colleagues on all sides of the House.

Today’s debate and amendments are the product of intense engagement, often to very tight timescales. I have already thanked colleagues who were involved in long team Zoom calls at different times, but the noble and learned Lord, Lord Hope, deserves all the praise that has rightly gone his way. I also add to the thanks from the noble Lord, Lord Fox, and the noble Baroness, Lady Hayter, to the Bill team. I thank the Bill manager, Shreena Kotecha, and Jayne McCann, Satchi Mahendran, Jefferson Yen, Dominic Entwistle, Katrina Gajewska, Bridget Micklem, Greg Dyke, Amy Smith, Dominic Bull and all their colleagues. I thank Martynas Zekas in my office, who has done such a fantastic job. They have all worked many long hours, late into the evening and at weekends, in difficult circumstances and often from home. They have all acted in the finest traditions of the Civil Service and we should put our thanks to them on the record. I also express my thanks to my ministerial colleagues—my noble friends Lord True, Lady Bloomfield, Lady Scott and Lady Penn. They have made invaluable contributions and helped to get this measure on the statute book. Thank you very much to all of them.

Throughout these debates, the enthusiasm for the common frameworks programme has been heartening. While discussions have been robust, as always, it is encouraging to hear unanimous support for the programme, which is a cornerstone of mutual co-operation between the Government and devolved Administrations. These amendments are the result of these discussions and underline the Government’s commitment to the programme. They make clear in the Bill the relationship between common frameworks and market access principles. I hope noble Lords will agree to support the Motion. I say to the noble Lord, Lord Fox, that some amendments go back to bring common frameworks into the Bill. I hope noble Lords will agree that this represents a positive conclusion to the work of your Lordships’ House on this Bill.